The Euro is heading for a 2nd straight day of gains against the US dollar as we enter the European trading session on the back of disappointing data released from the US last Friday which has cast into doubt the timing from the US Federal Reserve to cut back on their stimulus program.
Statistics from the Department of Labor showed the non-farm payrolls figure for last month hitting the market at just 194,000 which was well below analysts’ expectations for a figure of 500,00 new positions, but on the bright side, the overall unemployment rate fell from 5.1% to 4.8%.
If the NFP numbers had of come in as expected, it would have all but guaranteed that the US Central bank would have begun slashing their bond buying program before the end of the year which was introduced to boost the economy to fend of the devasting effects of the Covid 19 pandemic.
The Fed has been concerned over the performance of the jobs market for quite some time and has repeated on many occasions the employment situation was one of the main drivers in helping them decide on whether to introduce stimulus cuts and follow this up with rate hikes so for now they will probably wait and see how things unfold next month which should lend some temporary support to the Euro.
The economic calendar today remains very quiet and with the Columbus Day public holiday happening in the US, movement in the EUR/USD currency pair may remain subdued as investors wait for the more important news due for release tomorrow.
There may be a bit of volatility later today when Philip Richard Lane ,an Executive Board member of the European Central Bank delivers an economic speech.
On the chart we can see that the Euro has run into resistance once again at the $1.1576 mark which was previously a support level around 1 week ago. This may be a tough level to overcome due to the lack of economic new and the Eur/USD currency pair is likely to drift sideways as the day unfolds.
The big news for the currency markets this week will be Wednesday’s release of consumer price index figures from Germany and the US which will give the market the all-important inflation readings which at the moment, are closely being monitored by market participants and also by the US Federal Reserve and ECB.