EUR/USD: waiting for NFP
The market has strongly reacted on the absence of ECB hints at any policy easing. Mr. Draghi announced the regulator had lowered its GDP and inflation forecasts for 2013 and admitted they had theoretically discussed the option of introducing negative rates, but he has also underlined the improvement of euro zone’s outcoming data. As a result, EUR/USD jumped by more than 200 pips to $1.3305 and closed at $1.3243 (highest daily close since late February). On Friday the pair is consolidating around $1.3250.
Today’s data showed German trade surplus increased to 17.7 bln (forecast: 16.5B). French trade deficit came unchanged at 4.5 bln. Attention has turned towards key US jobs figures due at 12:30 GMT (NFP is expected to add 167K). Fears of worse-than-projected result caused by weak NFP from ADP on Wednesday keep weighing on USD.
Technically, EUR remains capped by the $1.3250 resistance (50% Fibo, May 1 high): despite the yesterday’s break higher, we failed to hold there. Given the increased market volatility, EUR could extend the upside today in case of a downbeat NFP data, but the more general view remains bearish. Resistance is seen at $1.3300, $1.3340/50 (61.8% Fibo), $1.3400 and $1.3460/80 (200-day MA, 78.6% Fibo). Buyers are concentrated at $1.3225, $1.3200/3190 and at $1.3150.
Chart. Daily EUR/USD