The US Labour Market Is Slowing Down. How Could This Impact Major Currency Pair Pricing?

FXOpen -

A weak employment report in the US contributed to a sharp pullback in major currency pairs, but it hasn't led to a full change in major trends yet. For instance, nonfarm payroll figures showed that:

  • The number of new jobs came in at 173K, compared to the forecast of 238K.
  • Average monthly wages decreased by 0.2% against an expected 0.3% increase.
  • Unemployment rose to 3.9% from 3.8%.

Following the slowdown in job growth, investors will eagerly await inflation data. If the figures meet or exceed expert forecasts, expectations for a rate cut by the US regulator could increase.

GBP/USD

According to technical analysis of the GBP/USD pair using the "chaos" system, we are seeing a corrective pullback after the formation of a reversal bar on April 22. Attention should be paid to price behaviour around 1.2520-1.2500. If the price rebounds from this range, it could strengthen towards 1.2640-1.2600. A drop below support at the entwined alligator lines may lead to a retest of the recent low around 1.2300.

Key events of the week include:

  • Today at 11:30 (GMT +3:00), publication of data on business activity index in the UK construction sector for April.
  • Thursday at 14:00 (GMT +3:00), Bank of England meeting and decision on the GBP base interest rate.

EUR/USD

After testing a significant resistance at 1.0800, the price corrected towards support at the alligator lines on the daily timeframe. Currently, the EUR/USD pair is above 1.0720-1.0700, and the probability of continued growth is quite high. However, if euro sellers manage to push below 1.0700, a resumption of the downtrend towards 1.0650-1.0600 may occur.

Today at 13:00 (GMT +3:00), we await the Eurogroup meeting. At 17:00 (GMT +3:00), a speech by the President of the German Federal Bank, Joachim Nagel, is scheduled.