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At yesterday's trading, the US dollar strengthened against the single European currency. The fact that the "American" is trading quite differently in relation to all its main competitors can be explained by the expectations of Friday's report on the US labor market. Based on these important data, investors will once again try to understand and determine the next steps of the US Federal Reserve System (FRS) regarding the timing of the start of the quantitative easing program. Strong employment data will strengthen the opinion of market participants that the Fed will begin to reduce asset purchases in the very near future, or rather at the end of this year. Naturally, in this scenario, the US dollar will further strengthen its position in the foreign exchange market. If labor reports disappoint market participants, the US currency risks falling under a wave of sales.
The main macroeconomic events of today for EUR/USD will be reports on retail sales of the eurozone, which will be published at 10:00 London time. Employment data from ADP will be received from the US at 13:30 (London time). Also today, the next speech of the president of the Federal Reserve Bank of Atlanta, Rafael Bostic, is scheduled. Let me remind you that in one of his last speeches, Bostic showed "hawkish" rhetoric and spoke in favor of the early curtailment of the quantitative easing (QE) program. Nevertheless, the main events will take place on Friday. Thus, for now, the movements in the foreign exchange market will be determined by investor sentiment and technical factors. In this regard, it is time to move on to the consideration of the euro/dollar price charts.
Daily
As expected in previous reviews of this week, the growth of EUR/USD is most likely of a corrective nature. The course of yesterday's trading confirmed this assumption. After the pair reached the 1.1640 mark on the rise, the bears again took the euro/dollar trades into their hands. In particular, this can be judged by yesterday's black candle with a closing price below the important technical level of 1.1600. Today, at the time of writing this article, the pair continues to show a downward trend and is trading near 1.1577. If the downward movement continues, the nearest targets of the players to lower the rate will be 1.1535, 1.1515, and the important psychological and technical level of 1.1500. However, on the eve of Friday's reports on the US labor market, it is unlikely that investors will start forcing events and try to move to trade on the pair below 1.1500. Although anything can happen in the market, so you need to be prepared for any turn of events.
H1
Judging by the technical picture at the older time intervals, the main trading idea for the pair continues to be sales. But for some reason, there is no special desire to sell at the very bottom of the market. The risks of running into a corrective pullback are too great. To avoid this, I suggest waiting for the euro bulls to try to return the quote to the 1.1600-1.1640 area. Moreover, if bearish candle signals appear there or under the 1.1600 level, try selling EUR/USD, but with small targets near 1.1540/35.
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