Back
5 Apr 2013
Forex: EUR/USD still down ahead of US nonfarm payrolls
FXstreet.com (Barcelona) - The EUR/USD remains more biased to the downside in correction to yesterday’s rally to 1.2949 high. This European morning’s upside was capped at 1.2939 and profit taking has brought it down to 1.2920 (-0.12% on the day). The economic calendar has released interesting indicators but the main focus of the day is due at 12:30 GMT, US nonfarm payrolls.
“The positive momentum in US labor market activity should be sustained in March, with the economy adding a further +195K jobs”, wrote TD Securities analysts. “While this will be a slowdown from the robust 236K pace in February, it is in line with the 6m trend”, they continued, adding that growth should be broadly-based, reflecting the improved tone in economic growth performance in Q1. “Notwithstanding this constructive view, and believe the recent initial claims/ADP report suggest downside in the coming months, risks are tilted to the downside reflecting the uncertainty on the impact from sequestration”, they concluded.
The first reading for GDP Q1 2013 came in at -0.6%. EMU retail sales contracted by -0.3% in February, more than the -0.2% expected and after a +1.2% rise in the previous month. The annualized figure rebounded from -1.9% (revised from -1.3%) to -1.4%, while market consensus was pointing to -1.8%. German Factory orders came in at +2.3% (MoM) and 0.0% (YoY) from -1.6% and -2.1%, respectively, surprising investors that were expecting +1.2% and -1.5%. The ECB announced LTRO repayments of €8.064bn from 20 banks, with the amount split roughly evenly between the first and second LTROs.
“Sharp reversal at 1.2743 signals, that the bias here has switched to bullish and probably the whole downtrend from 1.3710 is already over”, wrote Deltastock.com analyst Stoyan MIhaylov, with bullish outlook above 1.2890 support, for a break through 1.2950, en route to 1.3050 mark.
“The positive momentum in US labor market activity should be sustained in March, with the economy adding a further +195K jobs”, wrote TD Securities analysts. “While this will be a slowdown from the robust 236K pace in February, it is in line with the 6m trend”, they continued, adding that growth should be broadly-based, reflecting the improved tone in economic growth performance in Q1. “Notwithstanding this constructive view, and believe the recent initial claims/ADP report suggest downside in the coming months, risks are tilted to the downside reflecting the uncertainty on the impact from sequestration”, they concluded.
The first reading for GDP Q1 2013 came in at -0.6%. EMU retail sales contracted by -0.3% in February, more than the -0.2% expected and after a +1.2% rise in the previous month. The annualized figure rebounded from -1.9% (revised from -1.3%) to -1.4%, while market consensus was pointing to -1.8%. German Factory orders came in at +2.3% (MoM) and 0.0% (YoY) from -1.6% and -2.1%, respectively, surprising investors that were expecting +1.2% and -1.5%. The ECB announced LTRO repayments of €8.064bn from 20 banks, with the amount split roughly evenly between the first and second LTROs.
“Sharp reversal at 1.2743 signals, that the bias here has switched to bullish and probably the whole downtrend from 1.3710 is already over”, wrote Deltastock.com analyst Stoyan MIhaylov, with bullish outlook above 1.2890 support, for a break through 1.2950, en route to 1.3050 mark.