With the unemployment rate continuing to rise, should we focus on the euro's upside potential?

With the unemployment rate continuing to rise, should we focus on the euro's upside potential?

06.05.2024

Last weekend, the U.S. dollar weakened against the yen following the release of the U.S. April employment report on the 3rd, which showed that nonfarm payrolls fell sharply from 303,000 in the previous month to 175,000, and the unemployment rate worsened by 0.1 percentage points from 3.8% to 3.9%.The USD/JPY pair fell from 153.748 to 151.890, tracking a downward trend along the 20-period moving average (MA) on the hourly chart. Since the pair has broken below the 200-period simple moving average (SMA) on the 4-hour chart, traders should watch for a potential continuation of the downtrend during European trading hours.

European currencies rose against the U.S. dollar as the eurozone unemployment rate remained unchanged at 6.5%, according to the March employment statistics for the eurozone, which were also released on the 3rd.The EUR/USD pair rose from 1.0718 to 1.0812. An upward move was observed from the 200-period EMA on the hourly chart. On the 4-hour chart, the price has broken above the 200-period SMA with a real body candle, and on the daily chart, the RSI is rising around the 53 level; therefore, it will be worth watching to see if the euro continues to rise.

Today, at 10:45, China’s Caixin Services PMI; at 13:00, Indonesia’s real GDP; at 14:00, India’s Services PMI; at 16:50, France’s Services PMI; at 16:55, Germany’s Services PMI;at 17:00 the Eurozone Services PMI, at 18:00 the Eurozone Producer Price Index, at 20:30 remarks by Nagel, President of the German Bundesbank, at 21:25 remarks by Jordan, Governor of the Swiss National Bank, at 25:50 remarks by Barkin,Richmond Fed President, and at 26:00, remarks by U.S. New York Fed President Williams are scheduled. With the unemployment rate continuing to rise, I intend to cautiously monitor the euro’s upside potential.