EURUSD Erases Wednesday’s Losses

The USD came under renewed selling pressure on Thursday, losing all of its Wednesday gains. At the time of writing, it traded 0.6% higher, seen rising above 1.07 again.

US jobs market slows

Heading into today’s ADP print, analysts expected a 300,000 job gain in May (up from 247,000 in April). However, May showed only 128,000 new jobs, while April was drastically revised down to 202,000. 

This is the poorest monthly ADP job report since April 2020, with a drop in small company employment leading the way. Small businesses have lost 278,000 jobs in the last four months…

“Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels,” said Nela Richardson, chief economist, ADP. 

“The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming lately.”

In addition, new jobless claims decreased slightly from 211,000 to 200,000, while continuing claims also ticked lower to 1.309 million from 1.343 million previously. 

In Europe, Francois Villeroy de Galhau, a policymaker at the European Central Bank (ECB), stated on Thursday that inflation is too high and too broad. However, he still advocates only a 25 bps rate hike. 

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Outlook seems neutral

The EURUSD pair still remains within a medium-term downtrend, but it trades close to its upper line, near 1.0735. If the euro advances above that level, the medium-term bearish trend could be over, with the next target at previous lows at 1.08. Once the euro jumps above 1.08, the outlook could change to bullish.

Source: https://www.axiory.com/analytics/technical-analysis/eurusd-erases-wednesday-s-losses