The world’s first economy slowed down and the euro resumed its movement towards 1.2200. Experts significantly overestimated the April forecast for the labor market: employment outside agriculture amounted to 266 thousand jobs against 978. At the same time, the overall unemployment rate rose by 0.1% to 6.1%. The index of business activity (ISM Manufacturing PMI) in April fell from 64.7 to 60.7 points, which strengthened investors’ doubts about the sustained recovery of the US economy and the approaching high key rate cycle.
The main event for participants in the foreign exchange market will be the report on inflation in the United States. The head of the Fed, former Treasury Secretary Janet Yellen, expressed fears about the rise in prices caused by the FED injections. According to her, the rate should be increased in order to prevent overheating of the economy. According to the forecast of most experts, April inflation will rise to 3.6% in annual terms, which is significantly higher than the base level of 2.5%. Thus, the strengthening of the euro may stop in the area of 1.2200-1.2350.
EUR / USD remains bullish, accelerating gains from 1.2000 support. The reference point is the area of resistance 1.2200-1.2350.
RUBLE – the market has stabilized after the May holidays
Ruble-denominated instruments continue to be in demand among investors: the premium for geopolitical risk has decreased, and the US dollar is being sold off on the world currency market. Among the positive external factors, there is still a comfortable level of oil prices: Brent is trading at $ 67 – 69 per barrel. In addition, the long May holidays have significantly reduced trading activity. It is highly probable that the quotes of the dollar and the euro will continue to stabilize within the established trade boundaries.
The USD / RUB pair is trading below the 75.50 resistance and still has a chance to advance towards the 72.70 support.
The EUR / RUB pair is trading near the psychological mark of 90 rubles and does not lose the mood for a rush to 88 rubles. The main resistance is the level of 92 rubles per euro.
This information is not investment advice.
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