Yesterday’s high impact event for EUR/USD was the release of the non-farm payrolls at 5:30 AM PST. Turns out the jobs report was stellar, with the US economy adding 209,00 jobs in July. This beat the estimated 180,000. If you dug deeper into the report there was a bunch of additional positive statistics for the US labor force.
Now this is all great news for the US economy, US workers , the US stock market…and the dollar. Upon the announcement the dollar immediately strengthened against the Euro.
Within the first two minutes of the report’s release the Euro dropped almost 37 pips. It tried to recover but it kept getting dragged back down to a support level around 1.18277. This all changed around 6:45 AM PST when the Euro broke through its support levels and continued to drop lower and lower. By 7:21 AM PST the Euro fell down to a low of 1.17303. This is a drop of over 135 pips from 5:30 AM PST jobs report. I’m not sure if the continued drop at 7:21 AM was still because of the job report or if was because of some other economic catalyst.
The Euro never did really recover, closing at 1.1771 and confirming a loss of 110 pips for the day. It is good for me to see how much impact a jobs report can have on the USD/EUR pair. Obviously on major market moving reports setting up a proper stop loss is surely invaluable to limit the exposure to downside risk. This example shows how critically important it is to be aware of the economic calendar.