Image source: Thomas Reimer © 123RF.com
The ADP Research Institute in the US just released its employment report for May, according to which 2,760 million people have left the labour force the previous month due to the ongoing coronavirus crisis.
Despite the staggering surge in headline unemployment, the findings of the report are still much better than the consensus forecasts suggested. The initial market expectations were projecting an increase in the overall unemployment by 9 million.
ADP Unemployment Rate. Image source: TradingEconomics.com
Such results would have strained even more the already fragile US labour market, which lost more than 20 million jobs in April. This was revealed in the last issue of the ADP report.
The economic situation in the US continues to be muffled because of the coronavirus fallout, and the ongoing riots, which have been raging on for several days following the murder of George Floyd.
It should be remembered that the ADP employment reports provide a preliminary evaluation of the US labour market conditions. As such, the early ADP findings frequently tend to be off the mark compared to the final Non-Farm Payroll data, which is released by the government the first Friday after the ADP's own publication.
Even still, today's developments provide investors and US businesses with a sigh of relief, as there is now mounting evidence seemingly suggesting that the initial impact of the coronavirus hit may be smaller than previously feared.
This would be welcoming news for the recovering US economy, which is benefiting from its gradual reopening.
Meanwhile, the US dollar continues to struggle as the civil unrest across the biggest cities in the States rages on.
The EURUSD has recently managed to break out above the major resistance level at 1.11400, which is a crucial development in the establishment of the current bullish trend.
The underlying sentiment remains ostensibly bullish, and the price action has continued to develop as per our expectations from our last analysis of the pair.
If the price action manages to break down below the middle line of the Bollinger Bands, a new downswing may form to the major resistance level at 1.11400.
Following the aforementioned breakout, this level has subsequently transformed into a new support.
The expectations for such a dropdown may be further substantiated by the fact that the MACD has recently formed a bearish crossover, which could be perceived as an early indication of rising bearish momentum in the market.
EURUSD 1H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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