On Thursday, May 6, at the end of the day, the euro rate increased by 0.50% to 1.2065. During the day, the single currency received support from cross-pairs. Investors began to buy it after the release of excellent statistics in Germany and the eurozone.
Manufacturing orders in Germany rose to 3% (+ 1.7% forecast), while EU retail sales rose 2.7% in the same month, beating market expectations. On an annualized basis, the volume increased by 12% against the forecast of 9.6% and the previous value of -1.5%.
The US data also came out optimistic. The number of initial applications for unemployment benefits for the week ended April 30 was 498 thousand, (the forecast was 540 thousand). The report was another signal that the growth of the US labor market is accelerating. Massive COVID-19 vaccinations and government incentives are supporting the economy and creating new jobs.
Scheduled statistics (GMT + 3)
- At 10:00 am Switzerland will announce a change in SNB reserves for April.
- At 11:30 the UK is to publish the PMI for the construction sector for April.
- At 13:00, ECB President Christine Lagarde will deliver a speech.
- At 15:30, the US will announce a change in the unemployment rate and the number of people employed in the nonfarm sector for April. Canada will report on the change in the unemployment rate and the number of people employed in April.
- At 17:00 in Canada will be released Ivey’s PMI for April.
- At 20:00 Baker Hughes will present data on the number of active oil rigs.
- At 22:00 the US will report on the change in the volume of consumer lending for March.
At the time of writing, the euro is worth 1.2064. After the breakdown of the trend line (5), the growth accelerated to 67 degrees (3), where sellers met buyers with active sales. The high of the day was fixed at 1.2072. The short-term picture suggests a moderately bullish position. The pair may accelerate its advance towards the 1.2095 (2) -1.2104 zone.
Today the focus of market participants is on the labor market report (Non-Farm payrolls. NFP). The data on claims for unemployment benefits declined, reflecting the acceleration of growth in other indicators of the labor market. Today’s NFP report could reflect a 1.1 million rise in employment in April. The NFP is projected to reflect a 978K hike.
The unemployment rate should continue to decline to 5.8% amid accelerated recruitment and reduced pandemic worries.
After the publication of the report, it is worth looking at the dynamics of the yield on US bonds. If the yield decreases, the euro / dollar will move to the level of 1.2100. If the yield rises, then the dollar will rise in price, the euro will fall in price. The euro and pound crosses are trading in positive territory, so the sentiment for them is “bullish”. Buyers are preparing to update the highs.
Summary: on Thursday, the euro received support from the statistics on Germany and the eurozone. The euro / dollar pair met resistance at 1.2070. Trading in Asia is relatively calm. Market participants are awaiting the publication of a report on the US labor market. Buyers are set to move towards the 1.2100 level. The yield on the 10-year bonds is 1.568% per annum. The key support level is located at 1.53%. In case of further fall, we are waiting for the euro rate at 1.21.
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