07.06.201908:56 Forex Analysis & Reviews: EURUSD: Report on the US labor market will keep the US dollar weak and lead to an increase in the euro

The euro strengthened against the US dollar on Thursday after the ECB's interest rate decision. Despite the harsh tone of statements by Central Bank President Mario Draghi, the bulls continued to buy risky assets.

The data released in the afternoon on the US economy did not strongly support the dollar.

According to a report by the US Department of Labor, the initial jobless claims for the week from May 26 to June 1 remained unchanged at 218,000. Economists had expected the number of applications to be 212,000. Data for the previous week were revised upwards by 3000.

The US trade deficit narrowed slightly in April. However, the decline is directly related to a sharp drop in imports rather than an increase in exports.

According to the US Department of Commerce, the deficit in trade in goods and services in April 2019 decreased by 2.1% compared to March and amounted to $ 50.79 billion. Economists had expected a deficit of $ 50.8 billion in April. The reduction in imports was 2.2%, to $ 257.638 billion, while exports also fell by 2.2%, to $ 206.847 billion.

Despite the data of the US Department of Labor to improve labor productivity in the US in the 1st quarter of this year, traders left the report unattended, as it was worse than the preliminary estimate.

Thus, labor productivity outside agriculture in the 1st quarter increased by 3.4%, while, according to the initial assessment, productivity growth was 3.6%. Back in the 1st quarter of this year, labor productivity showed an increase of 2.4% compared to the same period of the previous year.

Meanwhile, unit labor costs in the 1st quarter decreased by 1.6% compared to the same period of the previous year, while a decrease of only 0.9% was expected.

As for the technical picture of the EURUSD pair, further growth will still be possible only after the break and consolidation above the resistance of 1.1275, which will allow us to count on a re-test of the weekly high of 1.1310 and its update in the area of 1.1360. If euro buyers fail to cope with the task, and the labor market data in the US, which is expected today, will not be so bad, the pressure on risky assets will increase, which will return the trading instrument to a minimum of 1.1200. On the contrary, a weak report could lead to a sharp rise in the euro above the resistance of 1.1305 and the renewal of monthly highs.

The Canadian dollar continued to strengthen yesterday after data that Canada's trade deficit in April 2019 reached its lowest level in the last six months.

According to a report by the National Bureau of Statistics of Canada, Canada's foreign trade deficit in goods in April amounted to 966 million Canadian dollars, while economists had expected the deficit to be 2.8 billion Canadian dollars. Exports in April increased by 1.3% compared to the previous month and amounted to 50.70 billion Canadian dollars, while imports fell by 1.4% and amounted to 51.67 billion Canadian dollars.