HomeContributorsFundamental AnalysisEURUSD Breaks Key Support After Weak ADP US Jobs Data

EURUSD Breaks Key Support After Weak ADP US Jobs Data

US stocks declined sharply on Wednesday as investors continued to watch reports about the Delta variant. The Dow Jones shed 323 points while the S&P 500 fell by 20 points. The Nasdaq 100 index rose by about 20 points. The decline happened after a relatively weak report by ADP that showed that the American economy added just 330k jobs in July, lower than the median estimate of more than 665k. The report cited the ongoing bottlenecks in hiring, that continued to hold back the labour market.

The key movers in the US were firms like Robinhood and Uber. Robinhood shares jumped by more than 50%, valuing the broker at more than $58 billion. It has jumped by more than 85% from its IPO. Uber shares declined by more than 4% in the futures market even after the firm published strong quarterly results. It warned of the rising driver shortage and the impact of the pandemic. The firm made an adjusted loss excluding taxes of $509 million from 837 million in the previous quarter. On Tuesday, Lyft said that it turned a profit in the second quarter.

The British pound remained in a tight range as investors waited for the Bank of England decision. The bank is expected to leave interest rates unchanged. It is also expected to leave its quantitative easing policies unchanged as uncertainties over the Delta variant spread. Traders will be watching the bank’s statement on inflation. In May, the members said that it would rise above 2% only briefly. But the rate has overshot the target in the past three months and there are worries that it will rise to more than 4% this year. The BOE will also publish its updated assessment of the economy.

EURUSD

The EURUSD pair broke out lower during the overnight session. The pair declined to a low of 1.1835, which was the lowest level since July 28. On the hourly chart, it managed to move below the bullish pennant pattern. It also declined below the 25-day moving average while the MACD has moved below the neutral level. The RSI has also declined close to the oversold level. Therefore, the pair may continue the downward trend as traders target the next key support at 1.1800.

USDCHF

The USDCHF pair rose to a high of 0.9072 after relatively weak US jobs data. On the four-hour chart, the pair rose above the 61.8% Fibonacci retracement level. The Relative Strength Index (RSI) has moved from the oversold level to the current 53. It has also moved above the 25-day moving averages. It remains below the important resistance level at 0.9132, which was the neckline of the head and shoulders pattern. The pair may keep holding steady as traders wait for the latest NFP data.

AUDNZD

The AUDNZD maintained the downward momentum as investors reacted to the latest strong New Zealand jobs data. Earlier today, the Australian statistics agency also published relatively strong trade numbers. On the four-hour chart, the pair moved below the previous descending channel. It also moved below the 25-day moving average while the RSI moved below the oversold level. Therefore, the pair may keep falling as investors target the next key support at 1.0350.

Octa
Octahttp://octaengine.com/c/?p=203&bt=gif&b=2369
Octa (formerly OctaFX) is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and a variety of services already utilised by clients from 180 countries with more than 40 million trading accounts.

Featured Analysis

Learn Forex Trading