Hot US labor market will pull EURUSD lower

Yesterday, the EURUSD currency pair dropped from overbought levels. But the previously formed price gap from 1.075 to the current price level remained unclosed. Therefore, the chances that the pair will continue its downward movement are still high. After reaching the level of 1.075 EURUSD will close its graphical "gestalt", enter the technical oversold zone, and thus will be ready for an upward movement. But this will be another story.

For now, let's see what economic event could trigger the continuation of the EURUSD downward movement.

The main economic events of this week will be a series of indicators on the U.S. labor market. These data are likely to be key for the upcoming Fed meeting, which is scheduled to be held on December 12.

This meeting will be the last one this year, and the decisions announced at the end of it will sum up the passing year.

So, all attention will be focused on the employment and unemployment rate.

The hot labor market will surely support the restrictive measures of the Federal Reserve and contribute to the strengthening of the US dollar in 1 or 2 months.

As it was mentioned earlier, the first preliminary results are to be released today, and such an estimate will be the number of job openings in the US labor market (The Job Openings and Labor Turnover Survey).

If the number of open vacancies is growing, it indicates the growing need of the economy in the workforce and high demand on the labor market. In such a situation, in order to meet their need for labor, employers are forced to raise wages to be more competitive in the market. Higher wage levels, in turn, accelerate consumer inflation, which eventually leads to tighter monetary policy. Therefore, it can be assumed that if the job openings rate is higher than the previous value of 9.55M, EURUSD could decline.

The final recommendation is to sell EURUSD, provided that the job openings rate is higher than 9.55M.

Profit could be fixed at the level of 1.0750. Loss — at 1.0925.