EUR/USD finds temporary support near 1.1400 ahead of Eurozone HICP, US NFP data

US Dollar PRICE This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Euro.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		2.79%	1.19%	0.73%	0.78%	1.67%	1.53%	1.93%
EUR	-2.79%		-1.58%	-1.97%	-1.96%	-1.09%	-1.23%	-0.86%
GBP	-1.19%	1.58%		-0.59%	-0.38%	0.50%	0.36%	0.73%
JPY	-0.73%	1.97%	0.59%		0.07%	0.91%	0.79%	1.33%
CAD	-0.78%	1.96%	0.38%	-0.07%		0.86%	0.73%	1.11%
AUD	-1.67%	1.09%	-0.50%	-0.91%	-0.86%		-0.14%	0.23%
NZD	-1.53%	1.23%	-0.36%	-0.79%	-0.73%	0.14%		0.37%
CHF	-1.93%	0.86%	-0.73%	-1.33%	-1.11%	-0.23%	-0.37%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

The DXY gained sharply on Wednesday as upbeat flash Q2 Gross Domestic Product (GDP) data and upside inflation risks warned by Federal Reserve (Fed) Chair Jerome Powell in the press conference after the monetary policy decision forced traders to pare bets supporting interest rate cuts by the central bank in the September meeting.

According to the CME FedWatch tool, the probability for the Fed to cut interest rates in the September meeting has diminished to 43.2% from 63.3% seen on Tuesday.

Meanwhile, investors await the US Nonfarm Payrolls (NFP) data for July, which is scheduled to be released on Friday. Signs of stable labor market conditions would further support traders to pare Fed dovish bets.

In the Eurozone, investors await the preliminary Harmonized Index of Consumer Prices (HICP) data for July, which will be released on Friday. Price pressures are expected to have grown moderately. In Thursday’s session, investors will focus on the inflation data from Germany, France, and Italy. On Wednesday, flash Spain HICP data showed that price pressures deflated month-on-month.

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

Why it matters to traders?

America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.

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