Will the Euro continue higher? And what to watch for in tomorrow’s NFP?Posted on Thursday, August 3 2017 at 6:31 pm GMT+0000
What to expect from tomorrow’s NFP?
In fact, the US labor market does not seem to be suffering from any difficulties, and the unemployment rate is at its lowest level.
The sharp decline in the dollar lately is due to political tensions, internal tensions related to the Russian file and interference in the elections. The failure of the US administration to achieve tax reform and increase government spending and even its failure to repeal and replace Obamacare, and the latest reason is the disappointing in inflation rates.
From here, we should focus more on the wage rate in Friday’s data instead on focusing on the number of new jobs added. A rise in wage rates will back the dollar easing of its 13 month low, otherwise a disappointing figure would confirm Fed’s doubts considering inflation levels. Therefore, exposing weakness to the US currency.
Will the Euro Continue higher?
The euro continued strengthening, benefiting from the Dollar’s weakness as well as the improvement of European economic.
Improved inflation data On Monday, job and job market data pushed the single currency to continue its bullish path and surpass the 1.1900 level.
Currently, the Euro entered the overbought territories what warns for a probable correction. We might witness some kind of pullback due to profit taking. Therefore the Euro might ease lower towards the support areas at 1.176 and 1.172 before its headed higher again.
The next target is 1.2000, but reaching this level without pulling back will require a sharp decline in the dollar within the coming days.