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EURUSD Edges Up As Weak US Labour Market Pressures the Dollar

Michael Abadha Blockchain market writer
    Summary:
  • The dollar remains on the edge as a weak US labour market raises prospects of another rate cut. But much more is at stake for EURUSD.

EURUSD stayed up in the New York session on Thursday, on mixed signals from the latest US economic data. The pair was at 1.1155, up by 0.2 percent in the intraday session at the time of writing, with the market giving more weight to pronouncements by Fed officials. Despite the euro’s recent gains, the EURUSD pair relatively flat on a monthly basis, signaling the dollar’s resilience.

Weak labour market exerts pressure on the dollar

The Federal Reserve announced a 50 basis point cut on US interest rates last Wednesday, leaving room for further cuts before the year ends. With the US labour market showing weakness, speculation is rife that another cut isn’t far off.

US Continuing Jobless Claims came in at 1,834k against the consensus forecast of 1,828k for the week ending September 18. That offset the dollar’s support from the Initial Jobless Claims which came in at 218k against analysts’ forecast of 224k. Furthermore, the previous week’s figures were revised upward by 3,000 to 222k. These added to the perception that US unemployment rate could spike in the coming weeks.

Four Federal Open Market Committee (FOMC) members, including Fed Chairman Jerome Powell were scheduled to speak in the New York session on Thursday. However, as much as the market will pick cues from their comments, greater attention will be on the August Personal Consumption Expenditure (PCE) figures set for release on Friday. The PCE is the Fed’s preferred inflation gauge and its reading will likely influence the Fed’s next rate cut decision.

EURUSD today

EURUSD pivots at 1.1154, and the RSI calls for further downside if resistance persists at that level. In that case, initial support could come at 1.1123. However, an extended bearish control could break below that level to invalidate the upside narrative and potentially test 1.1100.

Alternatively, the upside could prevail if the pair stays above the pivot level. In that case, the first resistance could come at 1.1171, but a stronger bullishness could break above that level to test 1.1190.

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