Eur/usd - page 334
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Eurozone Unemployment Rate Remains Unchanged
The euro area unemployment rate remained unchanged at an elevated level in August as businesses generated fewer jobs amid weak economic growth.
The jobless rate held steady at double-digit 11 percent in August, data from Eurostat showed Wednesday. The figure was expected to remain at July's originally estimated rate of 10.9 percent.
The number of people out of work decreased by 1,000 from July to 17.603 million. From a year ago, unemployment fell by 892,000.
However, the youth unemployment rate rose marginally to 22.3 percent from 22.2 percent in July.
For the months ahead, the momentum in the job market will be dictated by the recovering European periphery as Germany employment gains are smaller now that its unemployment rate has fallen to very low levels, Bert Colijn at ING Bank NV said.
Jack Allen, an economist at Capital Economics, said the labor market recovery is likely to remain slow. He noted that data from Germany and also surveys of employment intentions point to slow employment growth over the rest of the year.
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EUR/USD falls sharply, amid diverging data in the U.S. and euro zone
EUR/USD fell sharply on Wednesday, as optimistic U.S. employment data combined with disappointing monthly inflation in the euro zone propped up the dollar against its European counterpart.
The currency pair wavered between a low of 1.1158 and a high of 1.1261, before settling at 1.1177, down 0.0072 or 0.64%. EUR/USD remained in a tight holding pattern for the month, not falling below 1.10 or moving above 1.15. For the month of September, the pair was relatively flat falling by only 0.05% over the last 30 days of trading.
EUR/USD likely gained support at 1.1086, the low from Sept. 3 and was met with resistance at 1.146, the high from Sept. 18.
On Wednesday morning, payroll processing firm ADP said U.S. non-farm private employment rose by 200,000 in September, above analysts' expectations of a 190,000 gain. In August, the economy added only 186,000 non-farm private positions, a figure that was downwardly revised from a previous total of 190,000. By comparison, though, the initial government report only showed a spike of 140,000 jobs last month.
The reading provides optimism for Friday's highly-anticipated national employment report, one which is expected to be closely watched by the Fed. Earlier this month, the Federal Open Market Committee indicated that it wanted to see further improvement in the labor market before it rose its benchmark Federal Funds Rate for the first time in nearly a decade. In brief remarks at the Federal Reserve Bank of St. Louis Community Banking Conference on Wednesday, Yellen did not comment on the Fed's current monetary policy. Last week, Yellen indicated that the Fed will likely raise rates before the end of the year barring unforeseen developments in the global economy.
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Euro Pressured by Prospect of ECB QE Extension
The shared European currency declined further on Thursday after inflation in the euro area fell into negative territory, adding to speculation of further QE from European Central Bank (ECB).
Euro area inflation fell 0.1% year-on-year in September, figures showed yesterday, driven down by an 8.9% drop in energy prices.
The EUR/USD came after pressure following the data and it remains subdued, down 0.28% at $1.1144.
"Fundamentally the confirmation of negative September inflation in the euro area was seen as skewing the risks towards additional QE on the part of the ECB. This potentially supported risk assets but was negative for the euro," ANZ wrote in a research note on Thursday.
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Yesterday the EURUSD fell with a wide range and close in the red near the low of the day.
The currency closed below the 10 and 50-day moving averages, which is not a good sign for the bulls, looks like is going to test the daily support at 1.1097.
The key levels to watch are 1.1237 previous support now resistance, the 10-day moving average at 1.1187 (resistance), 1.1097 (support) and the 200-day moving average at 1.1077 (support).
The single currency registered a decrease against the US dollar on Wednesday and was trading at a price of 1.1175 at the end of the session. Thus euro wiped out all of its gains since the beginning of the week. The daily extremes were reached respectively at 1.1260 and 1.1157. The price went below average values, while the index of relative strength remain in negative territory.
This weeks range was very thigh so far - only 150 pips. That is a warning sign
EUR/USD: Pair Climbs After US Data, Tests $1.1200
Despite a very marginal immediate reaction, the latest jobless claims took the wind out of the greenback's sails gradually on Thursday and helped to push the pair toward the flatline.
Initial jobless claims showed 277,000 people claimed unemployment benefits last week, compared to the 267,000 a week earlier, while continuing claims dropped from 2,242K to 2,191K, the US Department of Labor announced on Thursday.
The pair bounced higher on the day, trading just below $1.1200, with choppy trading observed during EU trading hours.
In the previous session, the ADP report came out above estimates and hit 200,000, while the previous number was revised down from 190,000 to 186,000. The Chicago PMI, however, deteriorated sharply.
"While the latest US ADP employment report pointed to a continued resilience in the US labor market for September, the latest Chicago PMI data did nothing to assuage concerns about the chill rippling through the US manufacturing sector after activity slipped down to 48.7, from 54.4 in August," Michael Hewson, chief market analyst at CMC Markets UK, wrote on Thursday
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EUR/USD rebounded from the support level 1.11560 and let's see how the NFP will turn out to be.
On yesterday’s session the pair continued its downward movement from Tuesday. At the start of session bottomed at 1.1134 but finally the Euro managed to recover, recording moderate growth to a closing price of 1.1193. Additional gains were limited at 1.1208. Currently, the outlook remains neutral, as a break of the respective peak will open the opportunity to test the 100 period moving average at 1.1245. On the downside 1.1080 remains main target.
Yesterday the EURUSD initially fell but quickly found enough buying pressure to turn around and close in the green near the high of the day with a narrow range.
The currency did not had the strength to close above the 10 and 50-day moving averages, which is still sign of weakness to the upside and today we have the nonfarm payrolls data where is expected a rise in jobs of 203K the previous number was 173K.
The key levels to watch are 1.1237 (resistance), the 10-day moving average at 1.1188 (resistance), 1.1097 (support) and the 200-day moving average at 1.1077 (support).