The US dollar gained after the release of nonfarm payrolls on Friday. The release has also shown further wages growth and increased investors’ hopes for another Federal Reserve rate hike. Support is set at 1.24, resistance at 1.25.
Data released by the Bureau of Labor Statistics on Friday showed the nonfarm payrolls grew by 200k, significantly surpassing the expectations of economists surveyed by Reuters agency, who were expecting 180k. Unemployment rate stayed at a 17-year low at 4.1 percent. Wage growth numbers were highly important as the release showed average hourly wages grew by 0.3 percent, reflecting an annualized gain of 2.9 percent.
Wage growth numbers are especially optimistic, as the job gains did not raise any objections, but salary growth has been elusive. Solid labor market condition increases hopes for further acceleration in growth of the US economy. Atlanta Federal Reserve expects a gain of 5.4 percent in the first quarter. This would mean the best resuls since the rebound in mid-2009.
Monday may bring some important news for the common currency as Mario Draghi is due to present annual report in the European Parliament in Strasburg. Investors will be looking for the European Central Bank’s head to remark a sooner end of the quantative easing program.
Pic.1. EUR/USD chart.
The EUR/USD pair initially fell to the current support after the release of nonfarm payrolls, but was able to rebound and it is now seen around 1.245 level. The ISM services/non-manufacturing data will be the main event of the day, as a strong reading may further support the greenback. The euro could rise if Mario Draghi gives any information about a sooner end of the asset purchase program.