Breakdown of the latest developments on the global exchanges
Nov 7, 2021, 3:25 PM GMT

EURUSD Rebounds After the Robust U.S. Payrolls for October

EURUSD Rebounds After the Robust U.S. Payrolls for October

The EURUSD shows some early signs of stabilisation following the publication of the October non-farm payrolls in the U.S. However, the broader market sentiment remains ostensibly bearish-oriented. Have a look at our latest analysis of the pair to learn more about what this discrepancy could mean for the price action.

On Friday afternoon, the U.S. Bureau of Labour Statistics (BLS) posted better-than-expected employment numbers for October. According to the non-farm payrolls report findings, the labour market added 531 thousand new jobs vs 455k expected. This marks a sizable increase in the number of jobs created from a month prior when the U.S. economy created 312 thousand new jobs.

U.S. MoM Non-Farm Payrolls

Despite these overwhelmingly positive numbers, the greenback was on the retreat by the end of last week's trading session. As can be seen on the hourly chart below, the EURUSD rebounded from the previous dip after the release of the latest employment numbers.

This resulted in the creation of a spring pattern below the major Support Area (in green), which could potentially be interpreted as an early indication of an upcoming trend reversal. The MACD indicator registered this sudden uptick in bullish momentum on its histogram.

The price action went on to break out above the 23.6 per cent Fibonacci retracement level at 1.15537 and is currently consolidating above the 50-day MA (in green). However, the price action remains concentrated below the descending trend line (in red) and the 38.2 per cent Fibonacci at 1.15802, which is converging with the 100-day MA (in blue).

A potential breakout above the two would confirm the attempted trend reversal, whereas a potential denial below the trend line would imply the likely continuation of the downtrend further down south.

EURUSD 1H Price Chart

U.S. Headline Unemployment at a Year-Low

The robust U.S. payrolls for October drove headline unemployment to 4.6 per cent, which is at its lowest level since March 2020.

This performance is inlined with the expectations of the Federal Reserve for elevated jobs creation by the end of the year. It is also a welcoming change of pace for the broader economy following the somewhat disappointing factory activity numbers for the same period.

U.S. MoM Unemployment Rate