EUR/USD Forecast and Trade Ideas for June 06 2016

Previous trading day:

Unexpectedly weak data posted on US nonfarm payrolls on Friday influenced currency pair move to new levels at 1.1360 from levels around 1.12 traded previously. Released data show only 38k of nonfarm payrolls during May which is lowest level of indicator for more than last five years. Data released for April of 160k was already lowest level since September last year, and with significant drop during May, it is not quite clear if US labour market is moving in direction expected by Fed. Due to this reason, market is estimating that widely expected increase of Fed rates might be postponed for period after June or July meetings, which was reflected in pricing of US Dollar during Friday session. Fed Chair Yellen will hold speech today, hopefully providing some comments on Feds view on current labour market developments.

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List of results released during previous day are following:

EU results 3JuneFinal May Markit Services PMI for Germany show better than expected sentiment for services, with index reaching 55.2 from 54.7 initially estimated. Markit PMI for Euro Zone services is also  improved to 53.3 from 52.9 initially released.

Retail sales in Euro Zone is continuing down trend started as of the end of last year. Released data for show no change  on a monthly basis which is below market expectation of 0.4%. On a yearly basis, retail sales dropped to 1.4%, down from 2.1% previously posted.

US results 3JuneUS Unemployment rate dropped during April to 4.7%, better from market estimate of 4.9%. Further indicator decrease has been expected considering Feds targeting of full employment, but also following comments of several Fed officials on expectations of further drop in US unemployment.

US change in nonfarm payrolls reached new lows for last five and a half years reaching only 38k during May, and far beyond market expectations of 160k. Previously posted figure of 160k was already lowest level since September last year.

US average hourly earnings are continuing steady trend with 0.2% increase during May on a monthly basis, slightly lower than previous month result of 0.3%, but fully in line with market estimate. There has not been change on a yearly basis from 2.5% previously released.

US trade balance is continuing to improve with deficit reaching $-37.4b during April, up from $-40.4b previously released and better from market estimate at $-41.0b.

May final Markit US Services PMI index is modestly improved to 51.3 from 51.2 released for initial May estimate.

US factory orders are continuing up trend for second consecutive month, reaching 1.9% during April on a monthly basis. Factory orders dropped for -1.7% during February this year, reverting to 1.1% in March.

DAY AHEAD:

EUR/USD Economic Calendar for today is following:

Fundamentals 6June

German Factory Orders results for April will be released on a monthly and yearly basis. After low start from the beginning of the year, with -0.1% in January followed with -1.2% in February, factory orders reverted during March up to 1.9% on a monthly basis supported by foreign orders. Market is expecting modest slowdown during May to -0.5% m/m. German factory orders were standing at 1.7% on a yearly basis during March.

Update on released results you can follow-up on Euro Dollar News and EUR/USD Economic Calendar.

Chart of day:

Graph 6June

Check also Euro Dollar History Graph.

After release of extremely weak data on US nonfarm payrolls, currency pair reached new levels around 1.1360, from 1.12 previously traded.

Next resistance level is found at 1.1390 up to 1.1450 which is long term resistance.

On the opposite side, short term support levels are at 1.1320  and 1.12.

Below are presented some trading ideas for today, based on technical analysis taking into account current level of EUR/USD trend and excluding overnight open positions.

Trade idea 6June

For long term EUR/USD forecast from investment bankers check Euro to Dollar Forecast

Disclaimer: Above presented trading ideas represent personal view of the author and should not be treated as any sort of investment advice or trading recommendation.

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