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Will Payrolls Hurt Or Help The U.S. Dollar?

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Dear Traders,

While Thursday proved to be a volatile trading day, the volatile but choppy swings in the market were not to our liking. Entries were triggered and stopped out due to heightened volatility but there was little follow-through on either side.

The U.S. dollar gained traction ahead of yesterday’s FOMC minutes but the statement did not alter rate hike expectations. While the Fed saw gradual rate hikes as needed given a very strong U.S. economy, some Fed members are concerned about intensified risks around trade policy.

The focus now shifts to the U.S. NFP report scheduled for release at 12:30 UTC.

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U.S. Dollar Weaker Ahead Of NFPs

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Dear Traders,

The best performing currency pair on Thursday was the EUR/USD, which took another glimpse above 1.25 but was yet unable to hold that level. Our yesterday’s long signal has proved profitable while euro bulls lie in wait for a next leg up, targeting at 1.27. The question whether the single currency could be vulnerable to further gains will mainly depend on the demand for dollars following today’s U.S. labor market data.

One reason for the euro’s surge were reports that some ECB policymakers are pushing President Mario Draghi to give investors clearer guidance on when rates might rise. In a nutshell, these rumors confirm that the ECB is comfortable with the euro’s appreciation.

The most prominent event risk on the last trading day of this week will be the January Non-Farm Payrolls at 13:30 UTC and if payrolls exceed expectations combined with an uptick in wage growth we could see the dollar recovering some of its recent losses. However, traders should bear in mind that given the dollar’s strong downtrend, market participants might be inclined to sell USD at higher levels.

Recently, the release of the monthly NFP report failed to generate extreme volatility in the market, which is why traders now brace for a more muted market reaction. Whatever the case, we will prepare for both bullish and bearish scenarios.

EUR/USD

The current uptrend channel is still intact and after the euro refrained from falling below 1.2385 the chances are in favor of further bullish momentum, driving the pair towards 1.2650 and possibly 1.27.

GBP/USD: There has been no significant correction in the recent performance of the cable with the pair following a clear uptrend. How the cable will trade within the next hours will however depend on the outcome of the payrolls. If the pound finds its way above 1.43 we focus on higher targets at 1.4380 and 1.4450. For bearish momentum to accelerate, the pound would first need to fall below 1.4220 and further 1.4185.

Have a beautiful weekend!

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2018 Maimar-FX.

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Will NFP Help Or Hurt U.S. Dollar?

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Dear Traders,

The biggest story on Thursday was the rise of the euro which has surged to a high of 1.0987. The euro is currently supported by expectations of a Macron win in the final round of French elections this Sunday. While we bear in mind that if Le Pen surprises on Sunday, the market’s reaction would be far greater, the most likely scenario is however a victory of the pro-euro candidate Emmanuel Macron. Markets are therefore unlikely to budge much if Macron wins.

Apart from the French election, great attention will be paid to the Non-Farm Payrolls report which appears to be the market-moving event for this week. The U.S. Jobs report is forecast to show a job growth of 190K jobs last month but the focus will also be on Average Hourly earnings. A large miss in this key figure or a disappointment in payrolls growth may raise doubts about a Fed June rate hike. In other words, a disappointment would have a greater impact on the market than a strong report. In case of a weaker jobs report the U.S. dollar could come under strong selling pressure.

The NFP report is due at 12:30 UTC today.

We wish you good trades and a nice weekend!

Daily Forex signals:

Additional daily and long-term entries are available for subscribers.

View our daily signal alerts https://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service https://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2017 Maimar-FX.

www.maimar.co