By Matthew Anthony, Alpari
On Thursday the 4th of April, trading on the euro closed down. During the European session, the single currency dropped to 1.1231 against the greenback amid weak German and Italian data. Factory orders in Germany came out lower than expected, and Italy downgraded its economic growth forecast for 2019 to 0.3%, while increasing its budget deficit to around 2.3% of GDP.
Pressure on the euro increased during the US session on the back of a broadly stronger dollar and a weaker pound. The US labour market situation has improved ahead of the payrolls report on account of the number of initial jobless claims reported.
Pressure on the pound increased over reports that talks between the British government and the opposition Labour party are not going very smoothly. The euro dropped to 1.1206. By close, the pair had recovered to 1.1220.
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Day’s news (GMT+3):
- 09:00 Germany: industrial production (Feb).
- 09:45 France: imports (Feb), exports (Feb).
- 10:30 UK: Halifax house prices (Mar).
- 15:30 Canada: unemployment rate (Mar), participation rate (Mar).
- 15:30 US: nonfarm payrolls (Mar), unemployment rate (Mar), average hourly earnings (Mar), average weekly hours (Mar), labour force participation rate (Mar).
- 20:00 US: Baker Hughes US oil rig count.
- 22:00 US: consumer credit change (Feb).
The drop on the EURUSD pair stopped at the 61.8% Fibonacci level of the growth from 1.1184 to 1.1255 around the 45th degree (1.1202). At the time of writing, the pair is trading at 1.1234.
The fundamentals dominated the technicals yesterday. Trader attention today will be turned towards the US labour market report for March set to be released at 15:30 (GMT+3). This is important data for the US Fed as well as the market in general. If the number of new jobs created turns out to be low like last month (20k), it could ignite speculation on the possibility of lowering interest rates in the US this year, which would heap pressure on the dollar.
There’s no forecast on today’s chart due to the payrolls report. Also, this week has been particularly volatile, whether due to Brexit news, or the retreat from risky assets.