If data on job openings only hinted at the possibility of a significant deterioration in the US labor market, the employment data left no doubts about it. Employment increased by just 99,000. This is exorbitantly low considering the population size, age composition, and growth rates, which would require employment to increase by about 250,000 per month. Here, it's less than 100,000. Moreover, previous data was revised down from 122,000 to 111,000. In general, in the last twelve months, employment increased by more than 200,000 only in March. It's no wonder that the state of the labor market is gradually deteriorating.
Except that it did not lead to a sharp weakening of the dollar. Investors are reluctant to take risks just before the release of the Department of Labor's report. The main forecast remains the same—the unemployment rate is expected to remain unchanged. After yesterday's data, it's hard to believe in this. Especially since only 617,000 jobs have been created in non-farm sectors over the last four months. The situation with them is the same as with employment—to maintain labor market stability, about 250,000 jobs must be created monthly. At the moment, only about half of this number is being created. And judging by the forecasts, today's report will only show about 120,000 new jobs. In other words, even if the unemployment rate remains unchanged, which is highly unlikely, there is no doubt that it will rise soon.
All this should lead to a significant increase in pressure on the US dollar, and it seems the dollar will actively lose its positions.
The EUR/USD pair is in a recovery phase from a recent corrective cycle. The upper deviation of the psychological level of 1.1000/1.1050 serves as a support, where an increase in the volume of long positions was observed.
In the 4-hour chart, the RSI technical indicator is moving in the buyers' area of 50/70, indicating an increase in the volume of long positions for the euro.
Regarding the Alligator indicator in the same time frame, the moving average lines have changed direction from downward to upward, corresponding to the end of the corrective phase.
Expectations and Prospects
In case of further growth, we expect the euro to recover fully, with a target at the resistance level of 1.1200. This move may indicate an extension of the medium-term upward trend. However, due to the release of the United States Department of Labor report, technical analysis takes a back seat, as speculators will primarily focus on data when making trading decisions.
The complex indicator analysis points to the process of the euro's recovery in the short-term, intraday, and medium-term periods.
