Good day forex traders.
Welcome to another review of the popular currency pair EUR/USD.
We recently noted a rising of the Euro versus the US dollar. Having said so, many strong resistance regions laid ahead. We needed to ascertain the underlying currents.
Looking at the EUR/USD weekly chart above, we note that the currency pair is currently consolidating within the 1.22 to 1.26 region. The strong influence line of 1.24 is acting as a pivot for now and this does not come as a surprise.
The bollinger bands are suggesting that the bullish momentum may not be over yet. This would be an area to monitor closely.
The recent US Non-Farm Payroll continued on the peculiar situation. Strong employment but lacking in wages. A robust economy would require spending and hence this is worrying. BBC reports ”
Job creation in the US economy surged last month, but the annual rate of wage growth slowed.
The economy created 313,000 jobs in February, official figures show, far in excess of analysts’ expectations.
However, the unemployment rate remained at 4.1%, while the annual earnings growth rate slowed to 2.6% last month.
January’s annual wage growth rate – which had triggered fears over inflationary pressures – was also revised down from 2.9% to 2.8%.
The strong wage growth figure for January prompted sharp volatility on the stock market, as investors worried the US Federal Reserve would quicken the pace at which it increased interest rates.
‘Firing on all cylinders’
Despite a lower-than-expected wage increase in February, many economists said longer term trends still point to higher wages.
The US economy is in its ninth year of economic expansion, with an upswing in global growth and tax cuts passed last year helping to boost growth.
Friday’s report from the US Labor Department showed the biggest increase in jobs since July 2016, sending major stock indexes higher.
The three major US stock indexes climbed almost 2% by the close of trading and the Nasdaq closed at a record high. ”
The take away from here is that wages could be better. Even the spectacular January wage growth was revised lower.
Next week brings the US Retail Sales. As a fundamental tracker of the economy, insights into the current economic situation will provide guidance for our forex trading.