Yesterday's better-than-expected US employment data dampened market confidence that the Federal Reserve's next interest rate cut will be big.
The data showed that US companies created more jobs than expected last month, contradicting other indicators pointing to a cooling labor market.
With ADP's non-farm payroll change forecast at 124 000, the actual employment change was 143 000, 15% higher than expected.
The upcoming release of Nonfarm Payrolls this Friday will be the next critical test of the US economy's health.
In August, nonfarm payrolls amounted to 142 000, and in September it is expected to rise to 144 000. At the same time, the unemployment rate is projected at the last month's level at 4.2%.
For the Fed's November meeting, swap market participants expect monetary policy easing by about 33 basis points, down from 44 basis points last week.
There is now a 61% chance of the Fed lowering its key rate to a range of 4.50-4.75%, and a 31% chance of the Fed lowering its key rate to a range of 4.25-4.50%.
At the same time, it should be noted that from a technical point of view, EURUSD appears oversold on the hourly timeframe, which is confirmed by the formation of a bullish divergence with the MACD indicator.
The final recommendation is to buy EURUSD if non-farm payrolls don't exceed the forecast estimate of 144 000 and the unemployment rate doesn't fall below 4.2%.
The profit is taken at the level of 1.1100. The losses are fixed at the level of 1.0980.
The volume of the opened position is determined so that the possible loss, fixed with a protective stop order, is no more than 2% of the deposit funds.
This content is for informational purposes only and is not intended to be investing advice.
