Almost all major currencies showed a decline last week. The biggest decline against the US dollar was shown by the New Zealand dollar (-2.70%) and the Australian dollar (-2.41%). The following currencies recorded smaller declines: the Swiss franc (-1.01%), the euro (-0.72%), the Canadian dollar (-0.24%), and the Japanese yen (-0.02%). Only the British pound (+0.64%) rose in price. At the end of Friday, the main pairs showed mixed dynamics.
Fig 1. USD weekly dynamics.
On Friday, all eyes were on the US jobs report. The unemployment numbers for September turned out to be below market expectations, however, the figures for the two previous months were revised upwards. In addition, the unemployment rate fell to 3.7% and reached a 48-year low, which pleased Donald Trump. The growth rate of salaries coincided with market expectations.
In September, 134 thousand new jobs were created in the US non-farm sector, against the forecast of 185 thousand. The figure for August was revised from 201 thousand to 270 thousand, and in July from 147 thousand to 165 thousand. The total revision for the two months amounted to +87 thousand. And 134 thousand + 87 thousand gives us 221 thousand. This comes in at over 185 thousand.
The unemployment rate fell to 3.7% from 3.9% (previous forecast: 3.8%). The number of working-age population remained at the level of 62.7%. Hourly earnings rose by 0.3% m/m against the forecast of 0.3% and a previous value of 0.3% (revised from 0.4%).
The euro responded to the report by rising to 1.1550. The price, having held above 1.1500 for about an hour and a half, returned back to 1.498. Market participants chose not to pay attention to the lowering of the main indicator to 134 thousand, and still expect further rate hikes.
Day’s news (GMT+3):
9:00 Germany: industrial production s.s.a. w.d.a. (YoY) (Aug).
11:30 Eurozone: Sentix investor confidence (Oct).
24hr Japan: Health-Sports Day.
24hr Canada: Thanksgiving Day.
Fig 2. EURUSD hourly chart
After the publication of the session trend did not work, the price went up from the 45th degree by 45 degrees. The price is on the lb balance line. According to the price model from 1.1463 to the last bar, there is only one route – to update the minimum. Considering that today there is a pretty bleak news cycle, with trading in Canada and Japan closed today, and the line of the rising channel passing though the 45th degree, I would venture to suggest that on Monday the price will continue to trade inside this channel. If the price goes down from the ascending channel, then you should keep the level of 1.1470 as a target.