The Euro remains constructive after Thursday’s strong upside rejection; US jobs data in focus
The Euro stands at the front foot in early Friday’s trading, but holding below key barriers at 1.10 zone (double-Fibo resistance / falling 20DMA) which was cracked on Thursday’s rally.
Failure to clearly break higher marks the significance of the resistance.
The single currency was inflated by another negative release this week, as Non-Manufacturing PMI fell below expectations in Sep (52.6 vs 55.0 f/c and 56.4 in Aug), adding to Manufacturing PMI miss earlier this week (Sep 47.8 vs 50.4 f/c) as indicator fell to the lowest levels in more than ten years.
Also, employment gauge in ISM survey fell to 50.4 in Sep from 53.1 previous month, adding to negative signals ahead of today’s US jobs report.
Expectations for Non-Farm payrolls are for 140K new jobs in Sep vs 130K previous month, but average hourly earnings are expected to slow (Sep 0.3% f/c vs 0.4% in Aug).
Negative releases this week raise concerns about US economic growth slowdown that fuels hopes for Fed rate cut this month and possible another easing in Dec.
At the moment, markets slightly favor scenario of downside surprise in NFP report, even talking about substantial miss that would have significant negative impact on dollar.
Conversely, strong NFP beat would make rate cut less likely and inflate the greenback that would push Euro lower and signal an end of recovery phase.
The pair faces strong resistances at 1.1000/20 zone, break of which would open way towards next pivotal barriers at 1.1082/1.1109 (Fibo 38.2% of 1.1412/1.0878 / daily cloud base / 13 Sep spike high).
Falling 10DMA marks initial support at 1.0953, with break here to risk fall through 1.0900/1.0878 for attack at 1.0863 (Fibo 76.4% of 1.0340/1.2555).
Res: 1.0999; 1.1012; 1.1021; 1.1068
Sup: 1.0961; 1.0953; 1.0904; 1.0878