06.09.201909:46 Forex Analysis & Reviews: EURUSD: Strong fundamental statistics help the US dollar regain its position

Traders were unable to ignore the simply excellent data on the US economy, which was released yesterday afternoon, and returned to buy the dollar. The growth of the euro, which was observed in European trading, was mainly due to the return of major players in risky assets amid the easing of the situation in the trade conflict between the US and China.

Good indicators of the American labor market indicate the stability of the economy in the future.

According to the data, the number of jobs in the US private sector increased in August this year. The growth was quite significant, mainly due to the high rates of hiring among medium-sized companies and in the service sector. Small and large companies also experienced balanced employment growth.

A report by the ADP Research Institute and Moody's Analytics indicated that the number of new jobs in the private sector was 195,000, while economists had expected the number of jobs to grow by 140,000. Most jobs (77,000) were created in medium-sized companies.

The ADP noted that job growth remains strong against the backdrop of the slowing economy, and although the rate of hiring has decreased slightly, the number of layoffs remains small. As long as this situation persists in the labor market, it is simply pointless to talk about any recession.

Another signal indicating that the economy will receive support by the end of this year is the rise in wages of American workers. According to a report by the US Department of Labor, unit labor costs in the 2nd quarter of 2019 showed an increase of 2.6% per annum against the previous estimate of 2.4%. The ministry noted that the recent increase in labor costs fits into the long-term trend.

As for the weekly data, the number of Americans applying for unemployment benefits for the first time rose slightly but remained near historically low levels. According to the US Department of Labor, the number of initial applications for unemployment benefits for the week from August 25 to August 31 increased by 1,000 and amounted to 217,000. Economists had expected the number of initial applications to be 215,000. The number of secondary applications declined by 39,000 and 1,660,000.

An excellent report on production orders was good news for traders, as recently released data indicating a slowdown in activity in the manufacturing sector.

Manufacturing orders in the United States in July rose by 1.4%, and orders for civil aircraft became the growth leader. Last month's data was revised downward, where orders rose by 0.5% in June. Durable goods orders rose by 2% in July, while, not taking into account the volatile category, basic production orders increased by only 0.2%.

Activity in the US non-manufacturing sector continued to grow in August. According to the Institute of Supply Management, the purchasing managers' index (PMI) for the non-manufacturing sector of the United States in August rose to 56.4 points against 53.7 points in July. There are no problems with growth in this area in the USA, as well as in other countries. Let me remind you that index values above 50 indicate an increase in the activity.

As for the technical picture of the EURUSD pair, I pointed to the slowdown in the growth of the European currency, which happened. Today, all the emphasis will be placed on the report on the number of employed in the non-agricultural sector of the United States, which will lead to a surge in volatility, and it is likely to strengthen the US dollar in the afternoon. A break of the support of 1.1020 will increase pressure on risky assets and return the trading instrument to a minimum of 1.0990, below which it will be quite difficult to breakthrough at the end of the week. If the bulls reassert themselves, then consider the sale after updating the maximum of this week in the resistance range of 1.1085.