The EUR/USD price was stuck at the parity level after the latest US non-farm payrolls (NFP) data. The current price is in the range where the pair was in the past few days. It is also slightly above last month’s low of 0.9900.
US non-farm payrolls data
The EUR/USD price has been in a consolidation phase in the past few days as investors reflected on the diverging performance of the American and European economies. Recent data and events show that the European economy was struggling as the energy crisis continued.
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European gas prices have more than doubled in the past few weeks after Russia continued squeezing the region. In fact, Russia has paused gas deliveries to Europe and analysts worry that it won’t restart the shipments any time soon.
Data published this week revealed that Europe’s inflation surged to a record high of 9.1%. While oil prices have dropped broadly, the soaring gas prices mean that most assets will see substantially higher costs.
At the same time, the bloc’s labor market will continue tightening in the coming months. For one, many companies have seen costs rise due to gas prices. Also, the drying of Rhine River has made it costly for companies to operate.
The American economy has moved in the opposite direction. Recent data showed that inflation has started falling as gas prices retreat. Also, the labor market is still significantly strong.
Data published this week showed that the number of vacancies climbed sharply in the past few months. In addition, non-farm payrolls numbers released on Friday revealed that the economy added over 315k jobs in August, which was higher than the expected 300k.
Wages grew by 5.2% while the unemployment rate rose slightly to 3.7%. Therefore, the Fed and the ECB will likely move in the opposite direction in the coming months.
EUR/USD forecast
The four-hour chart reveals that the EUR/USD pair has been in a tight range in the past few weeks. It remains between the important support at $0.9950 and resistance at 1.0095. It has moved to the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved sideways at the neutral level.
The EUR/USD pair has also formed an inverted cup and handle pattern. Therefore, there is a likelihood that the pair will continue falling as sellers target the next key support level at 0.9850.
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Source: https://invezz.com/news/2022/09/02/eur-usd-forex-signal-as-eu-and-us-economy-divergence-widens/