Although the unemployment rate in the United States rose from 3.4% to 3.7%, the dollar managed to strengthen and return to the levels it was at on June 1st. It all comes down to the number of new non-farm jobs created. It was expected to be 180,000, which is not enough to maintain labor market stability, indicating that unemployment would gradually rise. However, there were actually 339,000 new jobs created. Furthermore, previous data was revised upwards by 41,000. In other words, the rise in unemployment may be sporadic and temporary. So in the coming months, it may not only return to 3.4%, but also drop below that level.
Today, the dollar can continue to strengthen its position, this time due to European data. The point is that the producer price growth rate in the euro area is likely to slow down from 5.9% to 2.1%. Many predict an even more significant slowdown in their growth rates. In any case, we are talking about a noticeable decrease, which practically rules out the possibility of further interest rate hikes by the European Central Bank. This will be the main reason for the weakening of the euro.
The volume of long positions has decreased as the EUR/USD pair approached the resistance level of 1.0800. This has led to a slowdown in the upward cycle and, as a result, a price reversal.
On the four-hour chart, the RSI downwardly crossed the 50 middle line, thus reflecting bearish sentiment among traders.
On the same time frame, the Alligator's MAs are intersecting each other, which points to the corresponding direction of the corrective movement.
Outlook
Keeping the price below the 1.0700 level increases the chances for sellers to subsequently retest the low of the corrective movement. Meanwhile, in order for the euro to recover, the price needs to return to the level of 1.0800.
The complex indicator analysis unveiled that in the intraday and short-term periods indicates a downward cycle.
