- US dollar exchange rates were broadly weaker on the day a US jobs survey revealed that fewer people are leaving their jobs each month to pursue higher-paying job opportunities.
- According to the platforms of currency trading companies, the price of the euro rose against the US dollar EUR/USD to the resistance level of 1.0915.
- Recently, the euro-dollar gains came after the job quit rate fell, which signaled to markets that the US labor market is slowing down, which would ease wage pressures and boost the chances of a rate cut by mid-year.
While Federal Reserve Chairman Jerome Powell's appearance before US lawmakers attracted media attention, the Job Openings and Labor Turnover Survey (JOLTs) report likely had a bigger impact on financial markets.
For his part, US Federal Reserve Chairman Jerome Powell said that US regulators are likely to significantly change their plan to require large lenders to hold more capital – a move that would be a major victory for Wall Street giants. Powell told lawmakers on the House Financial Services Committee on Wednesday, "I expect there will be broad and fundamental changes to the proposal." Also, added that no decisions have been made, but it is possible that regulators could scrap the plan put forward last July and propose a new version. He added, "That's a very reasonable option."
Last July, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency proposed a comprehensive plan that would increase the amount of capital the eight largest US banks must hold by about 19%. Industry groups have lobbied heavily against the plan, arguing that it would make them less competitive – and make home and business loans less affordable. At the same time, Republican lawmakers and at least one Federal Reserve governor have urged the Fed to scrap its proposal and start over. Meanwhile, Michael Barr, who oversees banking supervision for the Fed, has cast the proposed changes as a way to ensure that lenders can withstand crises.
EUR/USD Technical analysis and forecast:
Based on the performance on the daily chart, the price of the EUR/USD currency pair has begun to show signs of an upward reversal. Therefore, if the bulls continue their upward momentum by surpassing the resistance at 1.0955, there may be an opportunity to move towards the psychological resistance at 1.1000. This would trigger a strong bullish reaction and initiate a general upward trend. Clearly, this requires the announcement of US job numbers below expectations tomorrow, Friday. Conversely, during the same time period, a return towards the support level at 1.0820 is important to confirm that bearish control remains dominant.
The EUR/USD pair will be significantly affected today by the European Central Bank's announcement regarding updates to its monetary policy. Shortly, signals of tightening will support further bullish control over the trend, whereas a less hawkish tone from the bank could lead to the opposite effect.
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