The week for the euro started with a decline.

• NFP November report disappointed the market.

• The US Services PMI came out better than expected. The indicator has become a record since the beginning of the calculation of the index in 1997.

By the end of the week, major currencies closed in different directions. The largest decline was shown by the New Zealand dollar (-1.67%), the Australian dollar (-0.99%), the British pound (-0.79%), the Canadian dollar (-0.37%) The Swiss franc (+0, 71%), Japanese yen (+ 0.40%).

On Friday, December 3, at the end of the day, the euro rate increased by 0.05%, to 1.1306. Increased volatility in the market was observed in the American session after the release of statistics in the United States.

In November, the number of jobs increased by 210 thousand against the forecast of 550 thousand people. However, the unemployment rate fell to 4.2% in November from 4.6% in October (the forecast was 4.5%). The labor force participation rate was 61.8% versus 61.6% a month earlier. Average hourly earnings decreased to 0.3% MoM and 4.8% YoY from 0.4% MoM and 4.9% YoY. The drop in unemployment in November allows the Fed to accelerate the cut in asset purchases at its meeting on December 14-15.

The index of business activity in the US services sector in November rose to 69.1 p. From the October level of 66.7 p. (The forecast was 65 p). The rate of growth of the indicator has been at a record since the beginning of the calculation of the index in 1997.

Scheduled statistics (GMT +3):

At 10:00, Germany is to publish data on production orders for October.

At 12:30 the Eurozone will present the December Investor Confidence Index.

At 12:30 in the UK there will be an index of business activity in the construction sector in November.

MPC Member Broadbent will give a speech at 2:30 pm.

Current situation:

At the time of writing this review, major currencies are showing multidirectional movement. The euro, franc and yen are colored red, while the Australian, New Zealander and Canadian are colored green. After the payrolls, the main attention of traders turned to the FOMC meeting. They expect the US Central Bank to increase its QE cut to $ 30 billion a month from $ 15 billion.

There is also a negative factor that keeps buyers from buying risky assets. The shares of the Chinese developer Evergrande have collapsed. The company has ended its grace period for coupon payments. The company is to pay off liabilities for $ 82.5 million. The company is negotiating a debt restructuring.

The United States has warned of an impending default at the end of December. If Congress does not raise the public debt ceiling by December 21, the government may not be able to meet its financial obligations. This will also put pressure on risky assets in the coming days.

Technical analysis:

The euro / dollar pair is trading around 45 degrees - 1.1275. This level coincides with the trend line from the 1.1186 low. The price remains trading in the range of 1.1235-1.1383 from November 30. Major players can start hunting for stops that are outside the channel. Depends on this whether December will close with a decrease or an increase.

On Monday, the news background is poor. There is an opinion that the EUR / USD pair will keep sideways movement until Tuesday. The major cross has been increasing since November 24. This indicates that if the euro / pound pair continues to recover, and buyers will be able to raise the rate to the level of 1.1350. If the situation with Evergrande deteriorates, then the euro will have to retreat. Also in the spotlight is the topic of the US national debt, which will put pressure on the euro.

Summary:

On Friday, December 3, the euro closed slightly higher. Before the close, buyers were able to win back the losses they suffered after the release of a strong index in the services sector from ism. On Monday, the euro is trading lower as old problems have begun to emerge. Evergrande has ended its 30-day grace period for coupon payments. The United States has warned of an impending default at the end of December. Since today is Monday, sideways movement is expected in the November 30 range between the levels of 1.1235-1.1383.