Yesterday, the single European currency showed some decline, which is largely due to the pound. In the UK, there is a sharp deterioration in the epidemiological situation, which previously forced the government to postpone the complete lifting of restrictive measures for a whole month. However, the situation continues to deteriorate, and as a result, it was decided yesterday to close schools. It is quite obvious that there will be another postponement of the date of cancellation of quarantine measures after this. So, the pound went down rapidly, and the scale of the decline turned out to be sufficient to have a negative impact on other currencies through the dollar index.

Today in Europe, preliminary data on inflation are published. It should show that the growth rate of consumer prices has remained unchanged, and this is the worst case scenario. The most optimistic forecasts indicate the possibility of its reduction from 2.0% to 1.9%. Everything is developing exactly as the European Central Bank said, and inflation is gradually declining. The most important thing in all this is that if the forecasts are confirmed, then the European Central Bank simply has no reason to worry, and there is no need to tighten monetary policy. From the point of view of markets, in the current situation, this is an extremely positive factor that should contribute to the strengthening of the single European currency. However, it should be noted that the market yesterday ignored preliminary data on inflation in Spain and Germany. Perhaps the whole point is that investors are just waiting for the European data. But, there is a possibility that investors are waiting for something else -- the publication of a report by the United States Department of Labor. So, today's data may well be overlooked.

Inflation (Europe):

But as the market awaits Friday's release of the United States Department of Labor report, the employment data released today is almost certain to have a major impact. Employment may grow by 450 thousand, which is almost half as much as in the previous month. This should be the worst result in the last four months, and this indicates a sharp slowdown in the pace of recovery of the labor market. But it is precisely the restoration of the labor market that is the main condition for the restoration of the entire economy. In other words, the data will be perceived as a negative factor, which will clearly lead to a weakening of the dollar.

Employment Change (United States):

The EUR/USD currency pair, after 100 hours of walking in the 1.1900/1.1980 side channel, still managed to overcome its lower border, as a result of which a recovery movement arose relative to the correctional movement in the period of June 21-23.

Market dynamics continue to show signs of slowing down, while the speculative ratio continues to grow.

If we proceed from the current location of the quote, there will be a slight rollback relative to the downward cycle in the period of the previous day.

In order for the recovery move to enter the key phase, the quote must stay lower than 1.1875, otherwise a reverse movement in the direction of 1.1925-1.1950 is not excluded.

From the point of view of complex indicator analysis, it can be seen that technical instruments on the minute and hour periods signal a sell, due to the breakdown of the lower border of stagnation.