EUR/USD: NFP could beat estimates, providing a selling opportunity
|EUR/USD has been drifting off the highs it reached on Thursday as markets await US Nonfarm Payrolls. Expectations could be too low – which leaves room to see an appreciation of the dollar following the release. This may provide a selling opportunity, according to FXStreet’s Analyst Yohay Elam.
See: EUR/USD to drop to 1.19 in the next month amid inflation debate – Rabobank
Another sign of overheating could boost the dollar as expectations for interest rate hikes could appear
“If America gains significantly more than one million jobs, the dollar could rise on expectations for the Federal Reserve to begin tapering its bond-buying scheme. So far, only Robert Kaplan, President of the Dallas Fed, called for an early discussion on printing fewer dollars. He might be joined by others.”
“Average Earnings are forecast to drop as low-paying jobs will likely be a significant part of the new hirings. Once again, depressed estimates leave more room for an upside surprise.”
“Europe's vaccination campaign is gaining speed while America's is slowing down, eroding the dollar's advantage. However, Europe is far from experiencing inflationary pressures and will raise rates a long time after the US does.”
“Support awaits at 1.2045, where the 100 SMA hits the price. It is followed by 1.2015, 1.1990 and finally by 1.1945.”
“Resistance is at the daily high of 1.2070, followed by 1.2120 and by the April peak of 1.2150.”
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