Today's Currency Movers

EURUSD, Daily

Thursday morning I expected to see a move lower and then buyers stepping in between 1.1290 and 1.1223. The pair moved lower as expected and then signalled buys inside this range but there was no follow through and the lack of momentum turned to further down move. Currently EURUSD is trading at the May 5th daily highs. There has been again some attempt to take the pair higher but intraday resistance levels have halted the moves so far. As the time of Non-Farm Payrolls release is getting closer market reactions are likely to be subdued until the figures are released. As we have seen over this year NFP figure is capable of surprising both the markets and analysts. This figure can be in line or it can deviate strongly from the expectations. As there is no way of know what the figure will be and what the market reaction to this unknown figure is likely to be, committing to a trade beforehand is not recommendable. We should only trade when probabilities are on our side.

At the time of writing EURUSD is trading at a daily high from May 5th and has created a 4h hammer candle after it bounced higher from the 50 period SMA. In the daily picture the current price action takes place close to the upper Bollinger Bands and near February sideways range. The weekly candle with current price close to the Monday’s opening price suggests weakness over the coming few days. A strong rally higher would quite obviously negate this view. In 4h timeframe the Stochastic Oscillator is oversold while in daily chart Stochastics are rolling over from the overbought levels. This fits together with price wedging at resistance. Momentum has slowed down and I expect price needs to move lower before finding a level from which to bounce higher again. Region near weekly closing value (from end of March) at 1.0960 would be an interesting level to look for signals for long trades. Significant support levels for the pair are: 1.1035, 1.0970 and 1.0848 (50 day SMA close at 1.10867), while significant resistance levels are at 1.1400 and 1.1480.



Currency Pairs, Grouped Performance (% Change)

Changes have been nominal ahead of the Non-Farm Payrolls release. AUD has still been slightly stronger than others while GBP strength that we saw earlier today has eased a bit. JPY weakness is understandable as USDJPY has made a higher low yesterday and has moved nicely higher today.

Main Macro Events Today

• US Non-Farm Payrolls are likely to increase by 225k for April. An improvement over the 126k March headline but still lower than the 264k headline in February. The unemployment rate should tick down to 5.4% from 5.5% in March. The data should help underpin the dollar’s yield advantage over the euro following recent narrowing.
• Canadian Employment is expected to rise 15.0k in April (median is for no change) after the 28.7k gain in March. Employment managed to put together a solid total gain in March, but the details were weak. Business confidence remains subdued, suggesting a risk for a very modest jobs gain or outright decline in April that undershoots our estimates.

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