Sentiment on the euro switching to bearish

9 June, 2020

On Friday the 5th of June, trading on the euro closed down. The EURUSD pair shed 0.43% to reach 1.1289. Trading on the yen and Swiss franc also closed down. The main driver behind this drop was US employment figures. The report from the Bureau of Labor Statistics turned out much better than expected, which stoked optimism on global markets. The number of jobs in the US increased by 2.5m against an expected reduction of 8m. Unemployment dropped to 13.3% from 14.7%, where markets were expecting a rise to 19.8%. The euro collapsed as the crosses lost ground ahead of the weekend.

The pair bounced from the U3 line and returned to the LB line. At the time of writing, the euro is trading at 1.1286. All the major crosses, except for the EURCHF pair, are trading down. The major pairs are showing mixed dynamics. The biggest winner at the moment is the pound, which is drawing strength from the EURGBP cross.

Today’s economic calendar is virtually empty. The centre of attention is ECB President Christine Lagarde’s speech. She already talked about the bank’s monetary policy following their meeting on the 4th of June, so today’s speech won’t contain any surprises. Considering the current situation with the dollar and the euro crosses, today we expect to see a drop to the 135th degree at 1.1225. If the dollar undergoes a correction across the board, we could see the euro drop as far as 1.1185 (target on the D3 line).


Source  
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