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Flat expected for the euro until NFP release

Previous:

The euro closed up on Thursday. The US stats helped the euro bulls win back losses all the way to 1.1202. A hammer candle formation came off. The growth in the rate stopped exactly at the 67th degree, where the pair traded for 10 hours.

The USD lost after the publication of the ISM index for the manufacturing sector. The index stood at 49.4 in August (forecasted: 52.0). With an index below 50, the Fed is unlikely to raise rates in September. Due to this, today’s NFP will carry weight.

Market expectations:

The Non-farm Payrolls (NFP) is the key event for Friday. In Asia the euro/dollar has updated its maximum and is trading at 1.1201. I expect a fall in the rate to 1.1194 before the US stats come out. Where the price will be after the stats is anyone’s guess. That’s why I’ve not bothered with a forecast. The NFP is an unforecastable indicator, so we could see some surprises.

Day’s News (GMT 3):

  • 11:30, UK index for business activeness in the construction sector throughout August;
  • 12:00 Eurozone PMI for July;
  • 15:30, Canadian July balance of trade and labour output in Q2 of 2016. US average hourly wage for August, unemployment level for August and balance of trade for July;
  • 17:00, US factory orders in July.

Technical Analysis:

Intraday forecast: minimum: n/a, maximum: n/a, close: n/a.

Euro/dollar rate on the hourly. Source: TradingView

The euro/dollar has restored to the 67th degree on weak ISM manufacturing data. I expect a flat before the American session. If the euro/pound cross continues its upwards correction, the flat on the euro/dollar will be an upward one, and not as I have it on the graph.

The 112th degree heads through 1.1255. This is the target for the buyers if the NFP is lower than 180k and if previous values are reassessed downwards. The target is in the region of 1.1280 if we go off the U3.



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