Awaiting February’s US NFPs and unemployment data

February 05, 2021 14:30

Today, we will see the announcement of the US  employment data, from the publication of the NFPs and the unemployment rate from January. This data is one of the market’s most important each month, as this data helps us measure the health of the US labour system and the state of the most important economy on the planet.

Analysts expect an improvement compared to the previous month, since an increase of 50,000 jobs is expected after having lost a total of 140,000 jobs during the month of December, despite the Christmas season. Furthermore, the unemployment rate is expected to remain stable at the 6.7% level.

Over the last 5 months, this data has been successively worse than expected, which has caused the FED to maintain its current stimulus program and try to reinvigorate this situation. The United States Senate is pending approval of a $1.9 trillion fiscal stimulus package which includes direct aid to citizens, thus further increasing liquidity injections and monetary stimuli by both institutions.

Yesterday, we learned about requests for weekly unemployment benefits, which were slightly lower than those of last week, although these are still very high above 848,000 requests.

The pandemic in the United States is still out of control, just as it is in Europe, so we must carefully watch the vaccination process. For its part, Johnson & Johnson has asked the FDA for approval of its vaccine, and if it is finally approved, the vaccination process could get a boost towards improving future job prospects.

Meanwhile, the US dollar recovering ground against other currencies in recent weeks, because many investors are seeking refuge in the US dollar due to the increase in cases and the uncertainty generated during the Covid-19 pandemic.

This has caused the EUR/USD to currently be in a retracement after hitting highs at 1.23500 last month, retreating to the 50% fibonacci level of the last bullish momentum after breaking down a triangle formation (blue) causing that it is currently trading at levels below 1.20.

It is important to see if the price is able to recover that important quotation level which as acted as support or if, on the contrary, these declines continue to the next fibonacci level of 61.8%.

As we can see in the daily chart, this retracement has caused a downward cut of its moving averages of 18 and 40 sessions in black and orange respectively and a downward crossing of the 0 line in the MACD indicator. The stochastic indicator is at oversold levels, so it cannot be ruled out that the price may continue to decline as long as it does not rise above the 20 level, since the price is far from its 200 moving average. sessions and the uptrend line both in red.

Source: Admiral Markets MetaTrader 5. EUR/USD daily chart. Data range: from October 29, 2019 to February 5, 2021. Prepared on February 5, 2021 at 12:00 CET. Keep in mind that past returns do not guarantee future returns.

Price evolution in the last 5 years:

  • 2020: 8.93%
  • 2019: -2.21%
  • 2018: -4.47%
  • 2017: 14.09%
  • 2016: -3.21%

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