EUR/USD Forecast: Lose-lose situation ahead of the NFP

The EUR/USD stabilized around 1.1500 as tensions mount ahead of the US Non-Farm Payrolls. The event could prove a win-win situation for the US Dollar and a lose-lose for the Euro. 

The all-important jobs report is expected to show an increase of nearly 200,000 positions according to the official estimates. However, real expectations are higher after the ADP NFP showed an impressive gain of 230,000 private sector positions. Also, the ISM Non-Manufacturing PMI hit a record of 61.6 points in September, with a leap in the employment component as well. Annual wage growth is expected to accelerate to 3%.

On the other hand, some are concerned about the impact of Florence, the hurricane that battered the Carolinas may skew the results. The storm hit made landfall on the last day of the September survey.

So, a beat will be good news for the US Dollar while a miss will be blamed on Florence. A win-win for the greenback.

See the NFP Preview by Joseph Trevisani

The USD continues enjoying upside momentum following the data, rising yields, and Powell's hawkish comments. Also, fresh concerns about the US-Chinese spat also support the US currency amid safe-haven flow. US Vice President Mike Pence accused China of high-level and broad espionage, an accusation denied by Beijing but that already hit tech stocks, especially in China. 

In the old continent, there are no substantial figures coming out. Italy presented its growth forecasts which accompanied the budget plans. The 2.4% budget deficit planned for 2019 breached EU demands, and both sides remain on a collision course. This slightly weighs on the Euro.

It is important to remember that US traders will enjoy a long weekend due to Colombus Day on Monday and this can trigger some last-minute jitters.

EUR/USD Technical Analysis

 

The Relative Strength Index on the four-hour chart is above 30, indicating that the pair has exited oversold conditions. Moreover, the 50 Simple Moving Average crossed the 200 SMA to the downside, another bearish sign. Momentum remains to the downside. 

Support awaits at around 1.1465 which was the low point this so far this week. The next support line is only at 1.1395 which was a swing low in August. 1.1365 was a stepping stone on the way down, and 1.1300 is the yearly low.

1.1540 was a swing high on Thursday. It is followed by 1.1565 that supported the pair in late September and 1.1595 that capped the EUR/USD earlier in the week. 1.1620 capped the pair beforehand. 

More: EUR/USD is vulnerable to further downfalls on jobs Friday