EUR/USD: Tight Labor Market and Weak European GDP Data Affect EUR/USD Pair

Short Position

Take profit: 1.0460
Stop-loss: 1.0620
Timeline: 1-2 Days

Long Position

Buy stop: 1.0595
Take profit: 1.0670
Stop loss: 1.0500The EUR/USD currency pair experienced a sell-off, which lost momentum after Jerome Powell’s second day of testimony in Congress. The pair remained flat at 1.0547, a few pips above the lowest level recorded this month. With Powell’s statement now concluded, investors are now focused on the release of the upcoming US non-farm payrolls (NFP) data.
Investors are closely watching the upcoming US non-farm payrolls (NFP) data. Economists predict that the labor market, particularly the blue-collar sector, is strong. They anticipate that the US economy added more than 200k jobs in February, following the addition of 504k jobs in January. The unemployment rate is also expected to remain low, at around 3.4%. A separate report by ADP revealed that private payrolls increased from 119k in January to over 242k in February.

If the labor market remains tight, the Fed is likely to maintain its hawkish stance. The EUR/USD also responded to the weak European GDP data, which showed that the economy failed to expand in the fourth quarter, largely due to elevated gas prices. Looking at technical analysis, the EUR/USD price experienced a bearish breakout on Tuesday, after Powell’s initial statement. The pair moved below the 50-period moving average and the first support of the Woodie pivot points. At the same time, the MACD and signal lines moved below the neutral point, and a double-top pattern has formed. These indicators suggest that the pair is likely to experience a bearish breakout, with the next key level of support being at 1.046, the S2 level of the Woodie pivot points.

Relevant news