EUR/USD: Heading for the report NFP this Friday after the sharp post-ECB

© O Financista. The report NFP will he accentuate the fall of the EUR/USD?

By David Wagner – The EUR/USD has been strongly penalised by the ECB meeting yesterday, with once the ads dovish of the Central Bank have been digested, a balance sheet downside of almost 150 pips between the top of a 1,1320 marked shortly after mid day, and a low 1.1175 yesterday evening, the lowest since June 2017.

The ECB is the Euro KB

Recall that the ECB has gone to the maximum of what it could afford in terms of decisions dovish, surprising the market with a change to its “forward guidance” on rates, by excluding through its language of any increase this year.

The ECB has also announced the launch of an operation TLTRO of two years, while the market expected it merely to prepare the ground for an announcement at its next meeting.

Finally, Mario Draghi has announced a lowering of growth forecasts, which was expected, but the extent of the deterioration has surprised investors with a forecast of growth reduced to 1.1% for this year, against 1.7% in the previous forecast.

In this context, the Euro has strongly fallen, breaking successively under the low of this year at 1.1233, and then under the low of last year to 1.1213, to mark a low that had not been touched for almost two years.

Note that between the top of Monday at 1.1382 and the hollow of yesterday evening at 1.1175, the EUR/USD currency pair shows a weekly drop of more than 200 pips.

The NFP report this Friday

Today, the fate of the EUR/USD could once more depend on the economic calendar, with the report to the NFP on job creation, US in the month of February in the program.

Economists expect average of 181k jobs, after 304k in the previous month, for an unemployment rate expected to have fallen to 3.9% from 4% previously. The monthly growth in average hourly wages, an important data for the Fed in the context of the inflation forecasts, is expected to 0.3%, after 0.1% the previous month.

A new positive surprise, after the numbers already sharply higher than the consensus of the previous two months, would bolster the Dollar and would, without doubt, the pair EUR/USD toward new lows.

Bad numbers could however have an upward impact limited on the pair EUR/USD, jobs with a lesser importance in the current context of the US economy, close to full employment. In addition, a “catch-up” would seem to be natural after two consecutive months of job creation is exceptionally strong.

Technical thresholds to monitor short-term

From a graphical point of view, it should be noted that in the framework of a timid rebound, the Euro-Dollar is currently trying to hold above 1.12, but through immediate remains bearish.

The hollow last night to 1.1175 will be considered as the first support the potential, prior to 1.1150 and then 1.11. Has the upside, first resistance zone lies at 1.1235-50, before the area around the psychological threshold of 1.13.

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