Earlier in Europe, the EUR/USD peaked at 1.2982 after encouraging data on the US labor market lifted risk appetite, but failed to consolidate and then pulled back amid news that a Greek court ruled that pension reforms requested by the troika in order for Greece to secure more bailout cash may be unconstitutional.
In the American field, ADP, Jobless, ISM manufacturing, and construction spending has come out with good news for investors. "Given the recent upticks in employment through other external reports, expectations are looking for a positive gain in the US labor market for the month of October," comments the FXstreet.com's analyst Richard Lee. "This is the last report before the US Presidential Elections, and one that could help the near term fortunes of the greenback."
In the short term, market could expect little action for current session, "with 1.2880/1.2950 the most likely range," states Valeria Bednarik, chief analyst at FXstreet.com. "Technical readings in the short term had turned neutral although negative as price stands below 20 SMA and indicators below their midlines."
The Sideways EUR/USD pre-election
The EUR/USD trades at 1.2940 at the moment, "entering Asian session around 1.2950 for third time in a row," adds Bednarik. "Range dominates the board, and market players remain reluctant, ahead of tomorrows' US NFP data and next week presidential elections along with European Central Banks decisions."
On a wider view, the EUR/USD remains inside a broader 1.2800/1.3170 range where it has traded since mid-September. In the absence of shocking news out from Europe, the pair will likely remain inside its weekly range especially ahead of the US presidential elections.
Meanwhile, and again in the short term, the Bank of Tokyo Mitsubishi analysts are neutral on the prospects for EUR/USD but remark that the Greek austerity vote is key to EUR/USD in the shorter view. The bank believes that the pair continues to remain in a consolidation phase although that downside risks are rebuilding. In any way, the big event for direction will be the upcoming Presidential election.
Pay attention to Friday's Non Farm Payrolls, US unemployment report, European manufacturing PMIs.