EURUSD: bears gaining momentum

On Thursday the 2nd of April, trading on the euro closed down, with the EURUSD pair dropping to 1.0821. The US dollar ignored the record number of new unemployment benefit claims, which hit 6.6 million against a forecast of 3.5 million. Markets were already shaken after US President Donald Trump warned Americans on Tuesday to expect a tough two weeks ahead.

The number of confirmed coronavirus cases has surpassed 1 million. Demand for safe haven assets remains high, which is helping the dollar hold its own against the other major currencies.

Day’s news (GMT+3):

  • 10:50 France: Markit services PMI (Mar).
  • 10:55 Germany: Markit services PMI (Mar).
  • 11:00 Eurozone: Markit services PMI (Mar).
  • 11:30 UK: Markit services PMI (Mar).
  • 12:00 Eurozone: retail sales (Feb).
  • 15:30 US: unemployment rate (Mar), nonfarm payrolls (Mar).
  • 16:45 US: Markit services PMI (Mar).
  • 17:00 US: ISM non-manufacturing PMI (Mar).
  • 20:00 US: Baker Hughes US oil rig count.
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Current situation:

At 6.6 million, the number of initial jobless claims in the last week was double the amount expected. The dollar, however, ignored this, and the bulls failed to induce a rebound from 1.0875. The pair continues its downwards trajectory along the D3 line.

There’s no prediction in today’s review, since all eyes are on the US employment market, particularly the nonfarm payrolls report. We don’t make predictions on payrolls day,  but we’re inclined to believe that the market will largely ignore employment data for March, since it hasn’t been having much of an effect over the last couple of weeks.

The pair is declining within a downwards channel. The LB line is acting as a dynamic support level. Pressure on the euro could increase ahead of the weekend as the bears set their sights on 1.0768 and 1.0697.

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