- The EUR/USD pair declined after data from the BLS showed that the economy created 1.7 million jobs in July.
- The unemployment rate declined to 10.2% while wages rose by 4.8%.
- The pair also reacted to the strong German export and import data.
The EUR/USD pair declinedtoday as traders reacted to the US nonfarm payrolls and strong economic numbers from Europe. The pair is trading at 1.1800, which is below this week’s high of 1.1910.
Germany exports rise
Earlier today, the EUR/USD pair reacted to the strong trade numbers from Germany. According to Destatis, the country’s exports increased by 14.9% in June to €96.1 billion. The exports had risen by 8.9% in May. Still, the exports were 9.4% lower than the same month in 2019.
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The growth of exports was mostly driven by a sharp increase to the EU member states. The country exported goods worth more than €51.2 billion to these countries. Exports to China increased by 15.4% to €8.3 billion while exports to the US fell by 20.3% to €7.3 billion.
Meanwhile, the country imports increased by 7% to €80.5 billion. Imports from the EU rose to €44.8 billion while those from China increased by 20.2% to €9.7 billion. As a result, the country’s trade surplus increased to €14.5 billion from the previous €7.5 billion. This was the biggest trade surplus since April this year.
Another data from Destatis showed that the German industrial production increased in June. The production rose by 8.9% month-on-month and fell by 11.7% year-on-year. Production in industry, excluding energy and construction, increased by 11.1%. Production of intermediate goods increased by 5% while the production of capital goods increased by 18.3%. Most importantly, the vital automotive industry increased by 54.7% MoM.
US nonfarm payroll numbers
The EUR/USD pair is also reacting to the July nonfarm payroll numbers from the US. Data from the Bureau of Labour Statistics (BLS) showed that the US created more than 1.7 million jobs in July. That was lower than the 4.8 million jobs that the economy created in June. Analysts were expecting the nonfarm payroll number to come in at about 1.6 million.
The unemployment rate dropped to 10.2% from the previous 11.1% while the participation rate declined to 61.4%from the previous 61.5%. The U6 unemployment rate, which also includes people working part time, fell to 16.5% from the previous 18.0%.
Most importantly, the rising nonfarm payrolls numbers was accompanied by rising wages. The average hourly earnings increased by 4.8% as the average number of hours increased to 34.5.
These numbers came a day after data from the bureau showed that initial jobless claims rose by 1.1 million in the previous week. That was the first time that the claims declined in two weeks.
The challenge for the US economy is that the number of coronavirus cases in the country is rising, putting the ongoing recovery at risk.
EUR/USD technical forecast
The EUR/USD pair declined to an intraday low of 1.1800 from this week’s high of 1.1910. On the daily chart, the price is above the 50-day and 100-day exponential moving averages. Also, it seems to be forming a bullish pennant pattern, which is usually a bullish sign. This means that even with the decline today, the pair remains in a bullish trend as bulls target the next resistance at 1.2000.