Sell EUR/USD in the range of 1.0925-1.0935.
Updated
Yesterday, as scheduled, the US Department of Labor released the ADP employment report for March, showing 145,000, lower than the previous value of 242,000 and the estimated value of 200,000, which conveyed a somewhat weak sentiment. Although the importance of this data is not as important as the non-farm payrolls data to be released tomorrow, as an official data from the US Department of Labor, which is collected from about 500,000 anonymous US companies, it can still reflect the actual employment situation in the US more realistically, so it is also known as the "small non-farm payrolls."
So what information can we get from this data? Firstly, the decline and significant contraction of the ADP value indicate that the actual situation of US domestic companies is not optimistic, recruitment demand continues to decline, and the number of layoffs increases. These are all factors that can directly reflect the actual situation of the US economy. Under the stimulus of the Fed's substantial interest rate hikes, the US economy will gradually step into recession. The ADP data can become one of the confirming factors, so the results of this data will make some people feel uneasy because it indicates that the US economy has begun to decline.
Secondly, the ADP data is collected from about 50 anonymous domestic US companies, which is similar to the collection method of non-farm payroll data. However, non-farm payroll data is more official, representative, and has a greater impact on the market. With the significant contraction of ADP data, it is easy to associate that non-farm payroll data will also show the same situation. Once non-farm payroll data shows a significant contraction, the market's concerns about the US economy will be further intensified, which will inevitably increase the aversion to the US dollar. This is not friendly to the US dollar, and we need to pay more attention to it.
In addition, another data that needs attention yesterday is the ISM non-manufacturing purchasing managers' index (PMI), which is also officially released and mainly reflects the situation of the domestic US service industry. The result announced yesterday was 51.2, lower than the previous value of 55.1 and the estimated value of 54.5. Originally, the domestic US manufacturing industry was already very weak, mainly depending on the service industry to support it. However, according to the ISM non-manufacturing PMI data released yesterday, the domestic US service industry also showed a significant contraction and presented a very slow development trend. This also shows that the domestic US economy has problems, causing the development speed to become slower and gradually approaching the edge of economic recession.
Therefore, from yesterday's data, the domestic US economic situation is indeed not good, even somewhat bad. This undoubtedly puts tremendous pressure on the Fed. In order to control inflation, the Fed must continue to raise interest rates, but the side effect of raising interest rates is economic recession. Previously, due to various reasons, the US economy would not decline temporarily, but as the situation evolves, the power that can forcibly support the development of the US economy is becoming less and less, which will inevitably lead to an increasing possibility of recession. So, it depends on when the red line will be crossed. We need to patiently observe and wait.
Regarding the trend of the US Dollar Index, the personal opinion is that the current USD has not entered into a significant decline cycle, so there may be a correction but not a significant decline. After the release of the correction demand, the USD index will gradually start to rise. Considering the current situation, this possibility is becoming more and more likely. Therefore, we need to pay more attention and be cautious!
EUR/USD:
In summary, today we need to focus on the actual trend of the US Dollar Index. As long as it does not suddenly plummet, there should be no major issues. As for the EUR/USD currency pair, it is recommended to sell on rallies. Based on the market situation, the following suggestions are given:
Sell in the range of 1.0925-1.0935
Take Profit 1: 1.0905
Take Profit 2: 1.0885
Take Profit 3: 1.0865
So what information can we get from this data? Firstly, the decline and significant contraction of the ADP value indicate that the actual situation of US domestic companies is not optimistic, recruitment demand continues to decline, and the number of layoffs increases. These are all factors that can directly reflect the actual situation of the US economy. Under the stimulus of the Fed's substantial interest rate hikes, the US economy will gradually step into recession. The ADP data can become one of the confirming factors, so the results of this data will make some people feel uneasy because it indicates that the US economy has begun to decline.
Secondly, the ADP data is collected from about 50 anonymous domestic US companies, which is similar to the collection method of non-farm payroll data. However, non-farm payroll data is more official, representative, and has a greater impact on the market. With the significant contraction of ADP data, it is easy to associate that non-farm payroll data will also show the same situation. Once non-farm payroll data shows a significant contraction, the market's concerns about the US economy will be further intensified, which will inevitably increase the aversion to the US dollar. This is not friendly to the US dollar, and we need to pay more attention to it.
In addition, another data that needs attention yesterday is the ISM non-manufacturing purchasing managers' index (PMI), which is also officially released and mainly reflects the situation of the domestic US service industry. The result announced yesterday was 51.2, lower than the previous value of 55.1 and the estimated value of 54.5. Originally, the domestic US manufacturing industry was already very weak, mainly depending on the service industry to support it. However, according to the ISM non-manufacturing PMI data released yesterday, the domestic US service industry also showed a significant contraction and presented a very slow development trend. This also shows that the domestic US economy has problems, causing the development speed to become slower and gradually approaching the edge of economic recession.
Therefore, from yesterday's data, the domestic US economic situation is indeed not good, even somewhat bad. This undoubtedly puts tremendous pressure on the Fed. In order to control inflation, the Fed must continue to raise interest rates, but the side effect of raising interest rates is economic recession. Previously, due to various reasons, the US economy would not decline temporarily, but as the situation evolves, the power that can forcibly support the development of the US economy is becoming less and less, which will inevitably lead to an increasing possibility of recession. So, it depends on when the red line will be crossed. We need to patiently observe and wait.
Regarding the trend of the US Dollar Index, the personal opinion is that the current USD has not entered into a significant decline cycle, so there may be a correction but not a significant decline. After the release of the correction demand, the USD index will gradually start to rise. Considering the current situation, this possibility is becoming more and more likely. Therefore, we need to pay more attention and be cautious!
EUR/USD:
In summary, today we need to focus on the actual trend of the US Dollar Index. As long as it does not suddenly plummet, there should be no major issues. As for the EUR/USD currency pair, it is recommended to sell on rallies. Based on the market situation, the following suggestions are given:
Sell in the range of 1.0925-1.0935
Take Profit 1: 1.0905
Take Profit 2: 1.0885
Take Profit 3: 1.0865
Trade active
Has now reached the short range, sellTrade closed: target reached
Both XAUUSD and EURUSD have successfully reached TP1 and TP2
Can be closed early with profit or wait for TP3
Trade closed: target reached
EURUSD: successfully reached TP3
Trade closed: target reached
👊Join the free Telegram group:
t.me/Reliable_Trading0
🏆Send us a message to get VIP signals:
t.me/Reliable_Trading1
t.me/Reliable_Trading0
🏆Send us a message to get VIP signals:
t.me/Reliable_Trading1
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.