06.05.202409:39 Forex Analysis & Reviews: Hot forecast for EUR/USD on May 6, 2024

Just a few days ago, Federal Reserve Chair Jerome Powell expressed uncertainty regarding the timing for the rate cut due to the strong US economy. However, if the situation were to deteriorate, the central bank would promptly take action. On Friday, the market learned that the unemployment rate rose from 3.8% to 3.9%. But perhaps even more importantly, the latest US report showed that number of new nonfarm jobs created was only 175,000. This is quite low for the US economy and indicates a high potential for further growth in unemployment. As soon as investors saw this report from the United States Department of Labor, the dollar immediately started to lose ground. However, there was a noticeable retracement afterward, but it failed to return to its initial levels.

Today, the euro could strengthen. The producer price data, the rate of decline of which is expected to slow from -8.3% to -7.8%, could provide impetus. And although we are still talking about a decline, deflationary risks are clearly decreasing. This could be enough to support the euro.

During an intense upward movement, the EUR/USD pair reached a resistance level at 1.0800, and the volume of long positions fell around this mark. As a result, a technical retracement occurred.

The RSI has reached the overbought level, which corresponds to the timestamp as it hit the 1.0800 level.

On the same chart, the Alligator's MAs are headed upwards, which reflects the bullish sentiment.

Outlook

The price must settle above the 1.0800 level in order for the volume of long positions to rise. Until then, the retracement stage will persist, which fits within the framework of the upward cycle.

In terms of complex indicator analysis, it suggests a retracement from the resistance level in the short term. Indicators also signal an uptrend in the intraday period.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.