The European currency managed to keep its positions paired with the US dollar, like the British pound. Many traders and investors today will focus on the US labor market report, which can give a further direction for the US dollar.
If the data is better than the economists' forecasts (the number of workers outside the agricultural sector is expected to grow by 180,000) this could trigger the demand for the US dollar, which will be able to return to weekly lows in the support area of 1.1830 and then test larger levels in the 1.1770 and 1.1710 area as early as the beginning of next week.
Remember that the Fed makes a very important emphasis on labor market and inflation indicators, and in this regard even moderate growth, which may be slightly different from the forecasts, will allow large players to increase long positions in the US dollar.
On the contrary, if the data were worse than forecasts, or even show a reduction, the pressure on the US dollar will seriously increase along with the European currency, as market participants will turn their attention to the speech of European Central Bank President Mario Draghi next week. In this regard, the growth of the euro may also be limited, as many economists fear that Draghi may issue negative comments about the recent large growth of the euro against most of the world's currencies.
From a technical point of view, closing the month at 1.1880 is a very good indication for US dollar buyers. The reason for this recent attempt by the Euro at the end of the month is to drive the pair above the psychological mark of 1.1200, which could not be done, which leaves a chance for a larger downward correction in the trading instrument with the updating of levels 1.1630 and 1.1560 by the middle of this month.
If the demand for the euro continues, then reaching the limits of 1.2000 will be a powerful impetus for the further buildup of large long positions in the European currency with the update to 1.2160 and 1.2220.
Today data on industrial activity in China was published, which did not have a serious support for commodity currencies, although they were better than economists' forecasts.
According to the report of Caixin Media Co. and Markit, the indicator of industrial activity in China in August this year rose for the third month in a row. Thus, the index of supply managers for the manufacturing sector increased to 51.6 points from 51.1 points in July. A value higher than 50 signals an increase in activity.
The Australian dollar ignored data on housing prices in Australia, which in August this year did not change compared to the previous month.
This is a good signal for the Reserve Bank of Australia, which is doing everything to prevent overheating in the housing market, which is one of the biggest risks to the economy. According to the research group Corelogic, prices remained unchanged in August.
The further direction of the Australian dollar, which yesterday rose against the backdrop of rising oil prices, will depend on today's data on the US labor market.
