The dollar is steady after yesterday’s sharp appreciation as traders look to the Non-Farm Payrolls report. Yesterday’s corrective tone should continue if the jobs report comes in on the low end of forecasts.
The payrolls report is the main event this afternoon. Prior to the report’s release the dollar has been consolidating its gains yesterday as the market appears to be in a corrective mode. Trader’s should not mistake yesterday’s appeal for the dollar as the cause of yesterday’s dollar surge, but the extent of the market being over extended to one side enabled the sharp reaction.
Economists forecast the jobs report to show an increase of 185K new jobs added to the US economy in the month of April. My thoughts are a release below this number would extend yesterday’s move to the dollar and declines in commodity prices. An initial bounce in the EUR/USD could lead to further selling of the pair.
Traders should remember the last jobs report on April 1st.. At that time market sentiment was in favor of the euro. The market turned from initially buying the dollar on the knee jerk reaction of the report, only to offer real money better levels at which to enter long on the euro. Judging from yesterday’s trading, market sentiment is clearly in favor of the dollar.
For the EUR/USD, a breach of 1.4500 would open the door to 1.4410 where the rising trend line from the January low comes into play. Below that supports rest at 1.4250 and 1.4150. A jump in the pair above 1.4600 would target the mid-April high at 1.4650 followed by 1.4750.
Other relevant articles you may like
Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
