- U.S. job vacancies fell to 7.44 million, missing the estimate of 7.98 million.
- US consumer confidence jumped to 108.7, well above the forecast of 99.5.
- The upcoming presidential election in the US is causing uncertainty.
The EUR/USD forecast shows the return of bullish momentum after a long decline. The dollar weakened after the previous session’s employment data revealed unexpected weakness. At the same time, uncertainty surrounding the US election sent traders into the safe haven of gold.
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The US released mixed economic reports on consumer sentiment and employment on Tuesday. However, market participants focused on the employment numbers as the Fed closely monitors the labor sector.
The JOLT job creation report found job vacancies fell to 7.44 million, missing estimates of 7.98 million. The decline showed that there were fewer job openings for the unemployed, indicating weaker demand for labor. Soft numbers firmed bets for a November Fed rate cut.
Meanwhile, consumer confidence jumped to 108.7, well above the forecast of 99.5. However, this was not enough to significantly change the outlook for a rate cut.
Traders are on edge ahead of GDP and monthly employment data that will show the state of the US economy. The non-farm payrolls report is likely to reveal an increase of 111,000 jobs in October, well below September’s employment gain. A miss would fuel fears of a weak labor sector, raising expectations for a rate cut by the Fed. On the other hand, continued resilience could reduce the chances of two rate cuts before the end of the year.
At the same time, the upcoming US presidential election is causing uncertainty, sending traders to the sidelines. The race between Trump and Kamala is close, meaning there is no certainty about the likely outcome. Consequently, market volatility is likely to increase before, during and after the vote.
EUR/USD key events today
- German preliminary CPI m/m
- US ADP change in non-farm employment
- US GDP growth q/q
EUR/USD technical forecast: RSI bullish divergence
From the technical side, EUR/USD the price made a new high above the 30-SMA, supporting the bullish bias. At the same time, the price is trading above the SMA and the RSI is in bullish territory above 50.
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The downtrend recently stalled after the RSI made a bullish divergence. Weakness in the downtrend allowed the bulls to take control by breaking above the SMA. However, for the new bias to solidify, the price must remain above the SMA and reach higher resistance levels such as 1.0900.
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