statistics

FXMAG.COM: Could you please comment on the US NFP? On Friday, the US will publish the employment data for May 2023. The average forecast suggests NFP growth by 180 thousand after rising to 253 thousand earlier.This is not a confident expectation. After a winter during which the US employment market added over 200 thousand new jobs per month, these statistics look modest. However, in this case, high digits might imply a threat to the US economy. If the Federal Reserve System sees that companies continue to compete for high-skilled workers, it might continue with its tough monetary policy.Strong employment market data will encourage further interest rate hikes to prevent inflation from rising.The situation turns out paradoxical. Good employment reports are no longer seen positively because they could be the basis for a further rise in crediting costs.Data that differs from forecasts will cause increased volatility in the US stock market.

The EUR/USD pair executed a reversal in favor of the US currency on Friday and began a new decline, closing below the corrective level of 38.2% (1.0726). Thus, the overall decline of the pair may continue toward the next Fibonacci level at 23.6% (1.0652). A rebound from the level of 1.0652 will favor the euro and lead to some growth, while a close below it will increase the likelihood of a further decline toward the level of 1.0609.     On Friday, traders closely followed the US reports. There were many important events throughout the past week, but the labor market and unemployment data always held a special place in the hearts of traders. Without going into much detail, the statistics favored the bears, but the two most important reports showed different trends. The unemployment rate for May increased from 3.4% to 3.7%, although traders expected a rise to 3.5%. Meanwhile, nonfarm payrolls in May showed a result of +339K, exceeding expectations of +180K.   Thus, the unemployment rate turned out worse, but the payrolls were better. Traders concluded that the payroll report was more important (and I fully agree with them), so the dollar rose in price again. The US currency should continue to rise, as all recent statistical data indicates a good state of the American economy. The Federal Reserve (Fed) continues to maintain a "hawkish" position, and even after raising the interest rate to 5.25%, the economy continues to show growth, unemployment remains low, and the labor market creates more jobs almost every month than the market expects. These are compelling reasons for further dollar appreciation, as it has significantly lost value over the past year. On higher charts, there is a corrective potential towards the level of 1.03.     On the 4-hour chart, the pair reversed in favor of the euro, but the growth was short-lived. The quote decline may resume toward the corrective level of 38.2% (1.0610). A rebound of the pair's rate from this level will allow traders to expect a small increase toward the Fibonacci level of 50.0% (1.0941). If the quotes close below the level of 1.0610, the chances of further decline toward the Fibonacci level of 23.6% (1.0201) will increase.   Commitments of Traders (COT) report:   During the last reporting week, speculators closed 8,253 long and 242 short contracts. The sentiment of large traders remains "bullish" but has slightly weakened in recent weeks. The total number of long contracts speculators hold is 242,000, while short contracts amount to only 76,000. For now, strong bullish sentiment persists, but the situation will continue to change soon. The euro has been falling for two consecutive weeks. The high value of open long contracts suggests that buyers may close them soon (or may have already started, as indicated by the last two COT reports). There is currently an excessive tilt towards the bulls. The current figures allow for a continuation of the euro's decline soon.     News calendar for the United States and the European Union: Eurozone - Services Purchasing Managers' Index (08:00 UTC) USA - Services Purchasing Managers' Index (PMI) (13:45 UTC)   USA - Industrial Orders Volume (14:00 UTC) USA - ISM Non-Manufacturing Purchasing Managers' Index (PMI) (14:00 UTC)     On June 5, the economic events calendar includes three entries for the USA and one for the EU. The most important among them is the ISM index. The impact of the news background on traders' sentiment today may be moderate and occur in the second half of the day. Forecast for EUR/USD and trader advice: New pair sales could be opened on a breakout from the level of 1.0785 on the hourly chart, with targets at 1.0726 and 1.0652. I advise buying the pair on a breakout from the level of 1.0610 on the 4-hour chart, with targets at 1.0726 and 1.0784.      

Agriculture – USDA slashes corn and soybean crop ratings The USDA’s latest crop progress report shows that the USDA trimmed its crop condition ratings for US corn and soybean following dry weather conditions. The USDA rated 55% of the corn crop in good-to-excellent condition as of 18 June, lower than 61% a week ago and 70% seen at the same stage last year. Similarly, the agency rated 54% of the soybean crop in good-to-excellent condition, lower than 59% a week ago and 68% seen at the same stage last year. On the other hand, the USDA rated around 38% of the winter wheat crop in good-to-excellent condition, unchanged from a week ago, and up from 30% seen last year. Weekly data from the European Commission show that soft wheat shipments from the EU reached 30.4mt for the season as of 18 June, up 11% YoY. Morocco, Algeria, and Nigeria were the top destinations for these shipments. Meanwhile, EU corn imports stood at 25.3mt, compared to 16.1mt reported a year ago.

The test of 1.0975 on Tuesday afternoon, coinciding with the time when the MACD line was in the overbought area, prompted a sell signal that resulted in a price decrease of around 30 pips. Lending data in the eurozone and speeches from ECB members may maintain demand for euro and continue its upward trend.   Good indicators on M3 money supply aggregate and private sector lending volume in the eurozone may also lead to a new surge in prices. Similarly, hawkish remarks by ECB President Christine Lagarde, pointing out potential further aggressive actions on the central bank's balance sheet, will also strengthen demand for euro.   For long positions: Buy when euro hits 1.0958 (green line on the chart) and take profit at the price of 1.0995. An upward movement will continue if lending in the eurozone remains at a normal level, allowing the ECB to raise rates without problems. However, when buying, traders should make sure that the MACD line lies above zero or rises from it. Euro can also be bought after two consecutive price tests of 1.0935, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0958 and 1.0995.   For short positions: Sell when euro reaches 1.0935 (red line on the chart) and take profit at the price of 1.0903. Pressure will return in case of poor statistics from the eurozone. However, when selling, traders should make sure that the MACD line lies below zero or drops down from it. Euro can also be sold after two consecutive price tests of 1.0958, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0935 and 1.0903.     What's on the chart: Thin green line - entry price at which you can buy EUR/USD Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely. Thin red line - entry price at which you can sell EUR/USD Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely. MACD line- it is important to be guided by overbought and oversold areas when entering the market     Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.