All eyes are on whether the euro-dollar exchange rate will fall following the release of the employment report

All eyes are on whether the euro-dollar exchange rate will fall following the release of the employment report

05.05.2023

In the U.S. currency market yesterday, the U.S. dollar rose against the euro after data released yesterday showed that U.S. first-quarter nonfarm labor productivity unit labor costs rose from 3.2% to 6.3%.The EUR/USD pair fell by about 100 pips from 1.1091 to 1.0985. On the hourly chart, it broke below the 200-period SMA. However, since it remains above the 20-period MA on the daily chart, it will be worth watching whether the U.S. dollar maintains its strength heading into the weekend.

The euro fell against the yen following yesterday’s ECB policy rate announcement, in which the central bank raised rates by 0.25%—as expected by the market—to 3.75%. The EUR/JPY pair fell from 149.192 to 147.138. On the hourly chart, it dropped at a right angle from the 200 SMA.Following yesterday’s decline, the EUR/JPY pair has fallen well below the 75-period moving average on the 4-hour chart and is now trading just below the 20-period moving average on the daily chart. We will need to carefully assess whether the euro will recover against the yen following the ECB announcement.

Today’s schedule includes German manufacturing orders at 15:00, the Swiss Consumer Price Index at 15:30, French industrial production and the French manufacturing production index at 15:45, the UK Construction PMI at 17:30, Eurozone retail sales at 18:00,remarks by SNB Governor Jordan of Switzerland, at 21:30: Canadian employment data and U.S. employment data, at 26:00: remarks by Fed Governor Cook and remarks by St. Louis Fed President Bullard, and at 28:00: U.S. consumer credit balances.I’ll be watching to see if the EUR/USD pair extends its decline following the U.S. employment report.