Yesterday the number of job openings for October was published in the USA.
The previous September value amounted to 9.35 million vacancies, the forecast for October was 9.3 million, the actual value was much lower and amounted to 8.73 million vacancies. Thus, the demand in the labor market shrank by 6.6%. Such a decline implies a slowdown in the economy and is a warning signal for the Fed.
The key question now is whether further labor market indicators will confirm this assessment. If they do, it will be a strong argument for the Fed to incline towards easing the monetary policy in order to create a healthier environment for economic growth.
As a reminder, ADP nonfarm employment change report is expected to be released today, while Friday will see the release of key US labor market reports: nonfarm payrolls, unemployment rate, average hourly wage.
According to ADP (National Employment Report), it is expected that the number of employment changes will increase from 113K in October to 130K in November. If this forecast is not confirmed and the employment change is less than 110K, it will probably weaken the US Dollar sharply in the short term and push the EURUSD upwards.
According to the technical analysis, the EURUSD pair has almost closed the previously formed price gap by testing the level of 1.078. If the economic reports show a weakening of the labor market, then from a technical point of view EURUSD will have no obstacles to move above the level of 1.085.
The final recommendation is to buy EURUSD provided that ADP nonfarm employment change figure is less than 110K.
The profit could be fixed at the level of 1.085. Loss — at the level of 1.072.
This content is for informational purposes only and is not intended to be investing advice.
