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Here are the details of the economic calendar from July 2:
Last Friday, the United States Department of Labor published a report, which is considered one of the most important economic events in the world of finance. The June data reflected the rapid growth of new jobs by 850 thousand against 583 thousand in the previous reporting period.
In simple terms, business is trying to keep up with the rapidly recovering economy of the United States. However, there is one problem in the report, namely the unemployment rate. It rose from 5.8% to 5.9%, with a forecast decline to 5.7%.
The divergence of expectations for unemployment, despite the employment growth, did not favor the US dollar.
The market's reaction to the statistical data took place almost immediately. The value of the US dollar plunged against almost all currencies.
Analysis of trading charts from July 2:
The EUR/USD pair managed to slightly pull back after a rapid decline during almost the entire last trading week, where the price coordinates 1.1800 serves as a pivot point variable.
The economic calendar with data on the US labor market just played in favor of the pullback.
The trading recommendation on July 2 considered the level of 1.1800 as a possible pivot point, so the main selling positions were postponed until the breakdown of the 1.1800 mark.
The GBP/USD pair went into correction mode, restoring the pound's rate by about 0.7% last Friday. As some may already have guessed, the price of the US dollar is declining amid America's statistical data.
Trading recommendation for EUR/USD and GBP/USD on July 5, 2021
Today, the EU and the UK will release their data on business activity in the service sector for June.
* The index of business activity in the service sector is an indicator that is determined based on a survey of managers of companies working in the service sector in order to assess the current situation in this sector, as well as possible prospects.
An index above 50 points indicates a positive situation, while an indicator below 50 points signals a deterioration in the situation in the service sector.
As for the United States, today is a holiday due to Independence Day, which was celebrated in the country on July 4th.
Trading volumes may be reduced due to the absence of one of the largest players in the market, resulting in low-amplitude price fluctuations in the market.
Looking at the EUR/USD trading chart, one can see that the correction process is still taking place in the market, but there is a characteristic reduction in the volume of long positions. The deceleration coincides with the base area of the previous corrective move of June 21 – 1.1847.
In this situation, it can be assumed that a temporal amplitude is forming within the borders of 1.1840/1885, working on a breakdown of a particular border.
Let's concretize the recommendation into trading signals:
* Long positions or Longs means buy positions in anticipation of an increase in the value of the asset.
In this case, we were talking about reducing positions in the euro.
As for the trading chart of the GBP/USD, it shows that there is an upward trend in the direction of the correction, while the downward price development is still relevant in the market. Either the coordinates 1.3865 or 1.3900 may appear as resistance which will stand in the way of correction, relative to which the decline may resume.
* The resistance level is the so-called price coordinates, from which the quote can slow down or stop the upward movement. The principle of constructing this level is to reduce the price stop points on the history of the chart, where the price reversal in the market has already occurred earlier.
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