Forecast for EUR/USD on July 4, 2019

EUR/USD

On Wednesday, the eurozone had released optimistic economic indicators, and the US vice versa - pessimistic, but the markets only swung against the dollar for the kind, ending the day near original positions, because on Friday the most important employment data will come out, which the Fed again drew attention to. But it paid attention in a peculiar way - it did not attach importance to the weak data for May (Non-Farm Employment Change of 75 thousand). This may be a sign that the June Nonfarms will be strong enough to sow doubt on the market in the July rate reduction. Nonfarms are the traditional manipulative tool of the Fed, but we have not noticed for a long time that it was used explicitly. Perhaps it is time to use this tool. The problem is that since November last year, yields on US government bonds have steadily decreased, so in 10-year terms it decreased from 3.15% to 1.95%, which makes it possible to keep servicing the public debt at 21.987 trillion dollars at a moderate load, but on the other hand, the state budget is not growing decisively, and expenditures over the past year have increased by 1.86%. Also, Congress is in no hurry to raise the ceiling of public debt. For "prevention", the rate can be lowered at the next meeting, while market expectations will not be deceived, but you can make comments on a strong labor market and the moderate pace of the rate cut.

So, all the attention is on Friday's labor data, and today is Independence Day in the US, in which the dollar is traditionally strengthened by 10-20 points.

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