Forex News: The US Dollar continued to take the pair lower yesterday, breaking the 50 period Exponential Moving Average and briefly moving below the 1.1840 mark. The Euro recovered later in the session and some of the losses were erased.
The pair is bouncing at 1.1840 resistance but it is still trading below the 50 Exponential Moving Average, so at the time of writing the bias is still negative. We expect to see a break of 1.1840 support and possibly a move into 1.1775 during today’s session if the 50 EMA holds and remains resistance. A big role will be played by the U.S. employment data so the technical side will be secondary.
The most anticipated report of the week comes out today at 12:30 pm GMT: the U.S. Non-Farm Payrolls. The indicator tracks changes in the total number of employed people in the U.S., excluding the farming sector and is widely regarded as the most important jobs data. The forecast is 180K (previous 209K) and under normal circumstances, higher numbers strengthen the US Dollar. Volatility is almost always high at release time, so caution is recommended.
After failing to break 1.2930 resistance, the pair dropped hard and reached the key support and target at 1.2850. Now some rejection is present but the short term bias is still bearish.
The pair is facing a very important hurdle at 1.2850 and it already bounced higher yesterday, showing that the market is still respecting this level. Upside movement should be contained by the 50 period Exponential Moving Average and 1.2900 resistance, while to the downside, 1.2770 is the first target if 1.2850 is broken. As stated before, the US Dollar will be heavily influenced by the NFP numbers so the technical aspect will be secondary.
At 8:30 am GMT the British Manufacturing PMI comes out, showing the opinions of purchasing managers regarding business conditions in the manufacturing sector. It’s a leading indicator of optimism, with a medium impact on the Pound and with higher numbers strengthening it. The forecast is 55.0, very similar to the previous 55.1.