EURUSD, H1
US Nonfarm payrolls increased 213k in June with the unemployment rate rising to 4.0% versus the 3.8% May clip. The 223k rise in May payrolls was revised up to 244k, with April bumped to 175k from the prior 159k gain, for a net +37k. Average hourly earnings posted a 0.2% increase following May’s 0.3%, for an unchanged 2.7% y/y clip. The workweek was steady at 34.5. The labor force surged 601k versus the 12k May gain, with household employment 102k higher versus the prior 293k increase. The labor force participation rate improved to 62.9% versus 62.7%. As for other details, private payrolls increased 202k (ADP 177k), with the services sector adding 149k, and the goods sector up 53k. Manufacturing jobs rose 36k with construction 13k higher. Government employment was up 11k. Meanwhile, US May trade deficit narrowed to -$43.1 bln from -$46.1 bln in April. Average hourly earnings were softer than anticipated however. This is another solid report, though wage growth remains tepid.
This strong job growth data will put a positive spin on the June economic reports, while faster labor growth contributes to diminished pressure on the Fed to raise rates this year, and likely at the September 25, 26 FOMC, barring some unexpected catastrophe.
The Dollar slipped after the mix of data, where NFP were higher than forecast, and the Trade deficit narrowed slightly more than expected. EURUSD rallied to 3 -week highs of 1.1761, up from 1.1715 as USDJPY fell to 110.45 from over 110.65.
EURUSD continues to be supported by positive bias since June 28. A closing today above 50-Day MA at 1.1750 could open the way to 38.2% Fibonacci retracement since April’s drift, at 1.1840.
EURUSD Support level: 1.1765, 1.1840, 1.1900
EURUSD Resistance levels: 1.1710, 1.1625, 1.1570
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Andria Pichidi
Market Analyst
HotForex
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