Should We Be on Alert for Currency Strength and Weakness Based on U.S. Employment Data?

Should We Be on Alert for Currency Strength and Weakness Based on U.S. Employment Data?

03.07.2025

In the U.S. currency market yesterday, the U.S. dollar rose against the yen. The USD/JPY pair rose from 143.330 to 144.234. Price action was observed crossing the 20-period moving average on the hourly chart.On the 4-hour chart, the RSI has rebounded from the 30 level, and on the daily chart, a price reversal was observed after the price touched the -2σ line of the Bollinger Bands. During today’s U.S. trading session, the U.S. employment report is scheduled to be released one day earlier than usual, so traders should be on guard for volatility resulting from the release of this economic indicator.

Among European currencies, the euro fell against the U.S. dollar. The euro/dollar exchange rate dropped from 1.1810 to 1.1746.On the hourly chart, the price has moved from above the 20-period moving average (MA) to below it. On the 4-hour chart, divergence is observed between the RSI and the candlesticks, and on the daily chart, the band walk along the +2σ line of the Bollinger Bands is beginning to break down. On the other hand, no particular divergence is visible on the weekly chart, so traders should pay close attention to price movements during U.S. trading hours.

Today’s schedule includes Japan’s foreign and domestic securities investment data at 8:50, Australia’s trade balance at 10:30, Germany’s non-manufacturing PMI at 16:55, the Eurozone’s services PMI at 17:00, the UK’s services PMI at 17:30, and the Eurozone’sECB Governing Council Meeting Minutes, at 21:30: U.S. Initial Jobless Claims and U.S. Trade Balance,U.S. trade balance, U.S. nonfarm payrolls, and Canada’s international merchandise trade. At 22:45, the U.S. PMI will be released, followed at 23:00 by U.S. new manufacturing orders, U.S. durable goods orders, and the U.S. ISM Non-Manufacturing Index. Be particularly vigilant regarding currency strength and weakness in response to the U.S. nonfarm payrolls report.