Euro: USD/EUR (EUR=X) Market Participants Await Friday’s NFP Report

Euro: USD/EUR (EUR=X) Market Participants Await Friday’s NFP Report

Euro: USD/EUR (EUR=X) Market Participants Await Friday’s NFP Report

After a few market-moving data releases yesterday, the economic calendar is relatively light for EUR/USD until tomorrow. Friday’s US jobs report should trigger some volatility in the FX markets.

EUR/USD prices attempted to push higher on Thursday after the ADP reported weaker than expected job growth. The report reflected 67,000 additional workers last month while analysts were looking for a gain of 137,000.

But the data-induced rally was short-lived and the currency pair gave up the days gain shortly after the ISM non-manufacturing PMI data release. The figure came in softer than expected in November although not by a large margin. Further, the report points to a 1.9% growth in GDP which was encouraging. Reports released earlier in the week for the Euro area suggested GDP growth of 0.1% in comparison.

Despite the soft ADP report, analysts are still expecting the NFP report to reflect 186,000 thousand workers in November. This is only slightly lower from the 189,000 expectation at the start of the week. Further, the unemployment rate is expected to stay unchanged at 3.6% and average hourly earnings should tick up to 0.3%.

Technical Analysis

With a notable decline in FX volatility as of late, EUR/USD is seen trading in small ranges more often, and that is exactly what the pair is doing now.

The 100-day moving average has contained the downside in the pair. At the same time, the pair has struggled to rally above the 1.1100 level, similar to what happened in around the middle of November.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.12.

The projected lower bound is: 1.10.

The projected closing price is: 1.11.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 83.6785. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 4 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 59.77. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 67 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 107.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 15 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 2 period(s) ago.

Rex Takasugi – TD Profile

FOREX EUR= closed up 0.003 at 1.110. Volume was 30% below average (neutral) and Bollinger Bands were 38% narrower than normal.

Open     High      Low     Close     Volume___
1.108 1.111 1.108 1.110 52,749
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.10 1.10 1.12
Volatility: 4 4 6
Volume: 61,029 69,355 90,334

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX EUR= is currently 0.5% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of EUR= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on EUR= and have had this outlook for the last 16 periods.

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