EUR/USD is now slipping back down to the previous range, unable to hold on to the highs. Draghi did not provide a size for the ABS and did not really wave with QE and this initially helped the euro. However, the situation of the euro-zone isn’t that positive, and the gains are limited. The big event of the day is clearly the US Non-Farm Payrolls. Did the US job market rebound from the weak August?
Here’s a quick update on technicals, fundamentals and sentiment moving the pair.
- Asian session: The pair could not hold above 1.27 and fell back down.
- Current range:Â 1.2660 to 1.27.
Further levels in both directions:
- Below: 1.2620, 1.2570, Â 1.25, 1.2460 and 1.24.
- Above: 1.2660, 1.27, 1.2750 and 1.28.
- 1.2660 is strong resistance- where the now broken uptrend began.
- 1.2570 is the new low and becoming stronger.
EUR/USD Fundamentals
- 7:15Â Spanish Services PMI. Exp. 56.9 points.
- 7:45 Italian Services PMI. Exp. 49.6 points.
- 7:50 French Services PMI. Exp. 49.4 points.
- 7:55 German Services PMI. Exp. 55.4 points.
- 8:00 Final Services PMI. Exp. 52.8 points.
- 9:00 Euro-zone retail sales. Exp. +0.1%.
- 12:30 US Non-Farm Payrolls. Exp. 215K. See how to trade the Non-Farm Payrolls with EUR/USD.
- 12:30 US unemployment rate. Exp. 6.1%.
- 12:30 US participation rate. Exp. 62.8%.
- 12:30 US average hourly earnings. Exp. +0.2%, y/y 2.1%.
- 12:30 US trade balance exp. -41 billion.
- 13:45Â US Markit Final Services PMI. Exp. 58.5Â points.
- 14:00 US ISM Non-Manufacturing PMI. Exp. 58.5 points.
* All times are GMT.
For more events and lines, see the EUR/USD.
EUR/USD Sentiment
- Draghi doesn’t rock the boat: Not only did the ECB refrain from action, but it also refrained from details. A timetable for the ABS was all we got, but with the absence of a size for the ABS and without a clear mention of QE, markets got the impression that Draghi is not ready to do more just yet and the euro reacted with a rise. However, not acting doesn’t mean resolving the situation, and the euro’s gains faded.
- Important NFP: After we had only 142K jobs gained in August, we are now looking for a rebound back to the previous 200K+ range, or at least a revision to last month’s disappointment. It is also important to note the participation rate and wage inflation, that disappointed in recent months. See how to trade the Non-Farm Payrolls with EUR/USD. More: Did Bullard hint of an excellent NFP report?
- Rock bottom inflation: The ECB convenes as the level of inflation in the euro-zone is at rock bottom levels in both CPI, 0.3% and core CPI, 0.7%. They have never been this low together. The big question remains: will the low value of the euro be eventually reflected in higher inflation or is the situation even more dire?
- Mixed US data: Most data points this week have disappointed. Consumer confidence erased the gains, Chicago PMI dropped and the last straw was the ISM Manufacturing PMI. This already triggered a correction and the US dollar sold off. However, we are already beginning to see a correction. Jobless claims beat expectations hitting 287K and this is encouraging. The NFP will set the verdict.
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