Friday was the busiest day in terms of macroeconomic reports from last week. And as expected, they had a rather negative impact on the single European currency. After all, absolutely all statistical data favored the dollar's growth. But let's look at everything in order.
The euro started to come under pressure during the European session, when preliminary data on inflation in the eurozone were published. It showed that the rate of decline in consumer prices accelerated from -0.2% to -0.3%. That is, here you have both the fact that deflation has been going on for the second consecutive month, and it is deepening. In general, everything that investors are afraid of more than anything else. The worst thing is that such a development of events practically leaves the European Central Bank with no other choice but to further reduce interest rates. So it shouldn't be surprising that the euro fell after these reports were released.
Inflation (Europe):
A few hours later, the dollar grew due to the content of the United States Department of Labor report, which turned out to be significantly better than forecasts. Of course, only 661,000 new jobs were created outside agriculture instead of the projected 915,000. But this number was quite significant. More important is the fact that the unemployment rate fell from 8.4% to 7.9%. Whereas, even according to the most optimistic forecasts, it should have dropped to 8.2%.
Unemployment rate (United States):
The euro can get a good reason to restore its positions today. This will be driven by retail sales, which are expected to accelerate from 0.4% to 1.8%. This is a fairly significant increase in consumer activity, which largely compensates for the deepening deflation and, at least for a while, will make investors forget about such a regrettable fact.
Retail Sales (Europe):
The euro/dollar pair has been following the variable range of 1.1700/1.1770 for more than 70 hours, periodically piercing the set boundaries. The lateral stagnation appeared due to the structure of the correctional movement from the local low of 1.1612.
If we proceed from the quote's current location, we can see that there is an upward interest during the Asian session, which led to a price rebound from the 1.1700 area, in the direction of 1.1735.
A slowdown is recorded relative to the market dynamics, in the period of October 1 and 2, which is just confirmed by the flat stage in the market.
Looking at the trading chart in general terms (daily period), you can see the breakout of the lower border of the seven-week horizontal channel at 1.1700/1.1900, as a result of which a correction was formed.
We can assume that market participants will continue to focus on the boundaries of stagnation at 1.1700/1.1770, where there is a signal in the direction of the 1.1755/1.1770 area relative to the quote's current fluctuation.
From the point of view of complex indicator analysis, we see that the indicators of technical instruments on minute and hourly periods have a variable signal (buy/sell), due to the price movement within 1.1700/1.1770. The daily period, as before, signals a sell due to the price decline in September.
