On Monday morning, the EUR/USD pair looks relatively stable and is trading at 1.0720. Investors have already priced in last Friday’s statistics on the US labor market in prices and are ready for new information.
The nonfarm payrolls in the US gained 390K after adding 436K in April against market expectations of 325K. The unemployment rate remained unchanged at 3.6% in May, although it was expected to decline a little bit. The average hourly earnings showed 0.3% m/m, which was behind the expected reading.
Overall, the labor market data is looking rather “humble” and doesn’t provide the US Fed with sound reasons for being more aggressive in its monetary policy tightening – it was the major risk factor of these reports, and it didn’t materialize.
In the H4 chart, after completing the descending wave at 1.0630 along with the correction up to 1.0760, EUR/USD is expected to form one more descending structure to break 1.0603 and may later continue trading downwards with the target at 1.0474.
From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0 and may resume falling to reach and break this level. After that, the line may continue falling and update the lows.
As we can see in the H1 chart, EUR/USD is falling towards 1.0700 and consolidating above this level. Possibly, the pair may break this level and continue trading downwards to reach 1.0630. Later, the market may break this level and continue the downtrend with the target at 1.4980.
From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is heading towards 80 and may soon break this level. After that, the line may break 50 and then continue its decline towards 20.
Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
