FX.co ★ EUR/USD. Forecast for August 5, 2013

Data on Non-Farm Payrolls in July was unexpectedly lower, a surprise to many investors (162K vs. forecast for 185K). Data from June was revised downwardly from 195K to 188K. As the result the euro grew 74 points. Meanwhile, the Unemployment rate fell from 7.6% to 7.4%, however, it was to a greater extend due to decrease in the share in work force (i.e. retires, etc). Nevertheless, it should be noted that the unemployment rate declines among native population, even among teenagers aged 16 to 19, the unemployment rate dropped 0.3%, but it increases among immigrants. Total number of workers increased in all the spheres, trade, financial sector, in public health service, and public sector. On the whole, despite the disappointment pertaining to Non-Farm, the US situation in the sphere gets better. We suppose that, the Fed will not cancel the beginning of Qe3 starting from September, we expect similar outcomes from the investors, and consequently the decline of the euro.

Today at 12:00 UTC+4 PMI Services and PMI Composite in the Eurozone in July are published; PMI Services 49.6, PMI Composite 50.4. At 13:00 UTC+4 Retail sales in the Eurozone in June is issued, it is expected to drop 0.5% vs. growth for 1.0% in May. At 18:00 UTC+4 US ISM Non-Manfacturing index in July is revealed, it is estimated to be 53.0 vs. 52.2 in June. Thus, the drop of the euro is expected from today.

The first bearish target is support of trend line on the H4 1.3200, the second target is the range 1.3150/1.3163, the area of Fibonacci level 61.8% on the daily chart. If data is positive and testing level of 1.3294 is broken, one more attempt (the last one?) to 1.3335, the Kruzenshtern line on the H4 (blue sliding) is possible.