The significant impact of price movements at the end of last week after the release of the US NFP employment data report has surprised the market.
Examining the components of the report, US employment growth in October beat expectations, but fell short of the previous month's figure. Wage rates rose for the past month, but the annual reading showed a decline. Meanwhile, the unemployment rate worries the market when it records an increase surpassing forecasts and previous readings.
Thus, the market's reaction to the gloomy overall reading of the report saw a significant depreciation of the US dollar, while analysts assessed that there was profit taking at the end of the week.
It can be observed the price movement on the chart of the EUR/USD currency pair where the surge in prices that occurred at the close of the week's trading returned to the level at the opening of the price at the beginning of the week, simultaneously erasing the gains of the US dollar throughout the week.
After the decline from the beginning of the week reached a low on Thursday around 0.97300, the price has surged on Friday over 200 pips reaching back to the resistance level of 0.99500.
There was a difference (gap) in the opening price in the Asian session to start trading earlier this week affected by the news of the development of Covid-19 cases in China.
If the price surge pattern continues at the beginning of this week, the price increase is seen to pass the resistance at 0.99500 and will then test the parity level of 1.0000.
Continuing to rise higher, the resistance zone at 1.01000 is seen to be the next focus of the price after the bullish trend in the past 2 weeks failed to pass the zone.
Meanwhile, for the expected decrease, the price that drops from the 0.99500 level will be around the 0.9900-0.98800 zone with the expectation that there will be a reaction to attract the price for further movement indicators.
Continuing the decline lower is then seen heading towards 0.98000 or last week's low of 0.97300.
