There might be some benefit for the Euro as the week begins. The proviso is that the Dollar continues correcting downward. The daily chart shows the US Dollar index meets a supply area on a monthly basis.
Bulls Might Be Held Off for a While
It might be able to hold bulls off for a bullish advance for a moment. It will give rise to the possibility of a correction revealed by the chart.
EUR/USD price chart. Source TradingView
It looks like the Dollar index is going to top out close to the 107.80 area. A Fibo retracement level sits close to the initial swing high close to 105.70. If this were to become reality, there would have been a bullish alignment in the Euro this week.
If the US Dollar dips any further, the Euro will jump the Fibo barrier. It is potentially in the way of the initial lows that encounters a 61.8% Fibo retracement.
Earlier the pair was under intense pressure in the Tokyo stocks as the dollar rallied. The EUR/USD pair got to a 0.42% high on Friday. It strengthened from a low of 106.89 and printed a high of 107.34.
Market Stability and Volatilities
The market stabilized after a period of volatility that followed the assassination of Shinzo Abe, the former Japanese PM. The market’s focus then moved to reports from the US. The Non-farm payroll came in and beat the expected reports.
This event upset put assets like stock at risk. The result has caused a push back against domestic demands in the US. It might be moving towards contraction speedily.
The jobs generation beat the expectations placed on it. It rose to 372,000 against the expected 265,000. The rate of unemployment was firm at 3.6% for the fourth straight month.
Earnings on the hourly average were stable at 0.3% month-on-month and 5.1% year-on-year. But the rate of participation lost about 0.1% to reach 62.2%.
Labor is still not getting up in the midst of very strong job reports, said ANZ analysts. Household surveys revealed that unemployment was generally unchanged at 5.9 million. The pool of skilled labor is tight.
More attention will now be on US reports as there is a gap in the Eurozone calendar. The publication of June’s consumer price index will be the main event. Traders will watch the US retail sales very closely. A recovery in June might follow.