Only weak non-farm payrolls can drop dollar
While most currencies fluctuated in narrow ranges waiting for the data on US labor market at yesterday’s trades, market players won back pound. The more so since there was the reason for it. The Bank of England disappointed bulls, decreasing forecasts on economic growth and confirmed current interest rates. It ruined all hopes for increase in rates by the Bank of England in the nearest future, and bulls surrendered.
Today the data on US labor market will decide everything. Recently the market has slightly corrected its expectations of favorable figures for the report’s components. If earlier growth of new work places above 200K was regarded as a positive, then now appetite is lower, and figures below 200K, but above 150-160K aren’t considered as a tragedy. Market players have started to agree that increase of rates in the U.S.A. in December is inevitable and it supports dollar. Trend of dollar’s growth is still in force.
Yesterday EURUSD pair spent the whole day in consolidation without considerable movement against opening level. It allowed to “discharge” short-term technical indicators, which looked oversold, and retained the potential for downward movement. Risks of breakthrough below 1.0800 seem high. Herewith we don’t exclude that market’s reaction to unemployment report will be accompanied by sharp recoils in opposite directions. Pair’s consolidation below 1.0900 allowed us to correct yesterday’s recommendations. Short positions with stop at 1.1020 are still relevant. We recommend moving profit fixation below 1.0800. However, in case of the day’s closure below this level, it is worth thinking about retaining of short positions for longer period. Now there are no conditions for opening of long positions in the pair.
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