Baring a negative number...
The NFP is out at 830 AM ET. The expectations are for 200K. Does it matter? It is not likely to stop the Fed from acting next week on rates. What it could do is impact the expectations for the rest of the year and that will impact the dollar (all things being equal).
The EURUSD today has moved higher today, but now comes the data. It is hard to predict what a particular number might do. The Fed is still likely to tighten barring a total surprise (like a negative number). I guess wages coming in negative might be a problem too. Anything like 100 K and +0.2% earnings and the Fed will still tighten. That might not be good for the dollar, but the Fed will still tighten.
So we look to the technicals for clues.
The chart above shows the targets to the upside and the downside.
ON the upside (weaker number or market already discounted and still trading ECB from yesterday):
- 1.0621. 38.2%
- 1.06290-32. Swing levels
- 1.0637. 200 bar MA on 4-hour chart
- 1.06608. 100 day MA AND 50% of the move down from the Feb high. The combination makes that level a key level for buyers and sellers. Stay below (or fail quickly on a break) and we could see that rotation back lower. Move above and stay above and the buyers are showing their might. PS a move to that level would be a 92 pip trading range for the day. That is certainly in the realm of possibility. The 22 day average is around 70 pips. As a guide yesterday had a 91 pips trading range and the market tired.
- 1.06789. High area from Feb 16/17
- 1.0700. 61.8% and the natural target
ON the downside.
- 1.0576. 100 bar MA on the 4-hour
- 1.0571. 100 hour MA
- 1.0564. 200 hour MA
- 1.0550. Minor support
- 1.0521-24. Swing low from Feb 15 and low from yesterday
- 1.0493. Double bottom from lows in February and March.
Just because the prices initial reaction is up does not mean we go to all the targets. The same is true for the downside. They are just steps along the way. The move off the number might stall at any level and find support buyers/resistance sellers.
Also understand that with the Fed move likely prices in, it kinda makes it even more difficult to trade. Pay attention to the levels as a roadmap. but understand risk is up, trading is difficult. So if you want to fade a move either way, do it against a level. If you want to trade a break, make sure you define your risk in case there is that fake break. I don't have a warm fuzzy feeling about this one....