Can U.S. Payrolls Increase Investor’s Appetite For Risk?

Dear Traders,

Thursday was again a trading day without any profitable movements in the EUR/USD. Our short-entry has proven unsuccessful as the euro found a short-term support at 1.1050. We now focus on an upside break above 1.1120 for bullish and vice versa, below 1.1025 for bearish engagements. Unlike the euro, the cable fluctuated within larger ranges, marking a current trading range between 1.3050 and 1.2875. As we generally expect further losses in the pound, a break below 1.2875 will be the most closely watched scenario in the near-term.

All eyes will be on today’s U.S. jobs report with market participants wanting to see if the disappointing May Non-Farm Payrolls were an aberration or a signal that the U.S. economy lost momentum. The payrolls report is expected to show a job growth of 180,000 workers, confirming that last month’s drop was a temporary thing. If data disappoints, however, the U.S. dollar could be vulnerable to losses, sending the euro and pound higher in return. In general terms, the dollar’s performance will hinge on investor’s risk appetite.

The June Nonfarm Payrolls report is scheduled for release at 12:30 UTC. On every payrolls day we remind traders that this is a high risk event which should be traded with caution. In phases of extreme high volatility, pending orders can be triggered and stopped out within seconds, which is why we recommend waiting until payroll figures are released before entering the market.

EUR/USD

As long as the euro trades below 1.11, the bias remains slightly bearish. Provided that the short-term downward channel remains intact, we will focus on a break below 1.1050 and 1.1020, which could send the euro towards 1.0970 and 1.0850. The descending triangle becomes void as soon as the euro climbs above 1.11.

Chart_EUR_USD_4Hours_snapshot8.7.16

 

 

We wish you good trades and a wonderful weekend!

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