EUR/USD: Market turns indecisive ahead of US Nonfarm Payrolls


  • EUR/USD's daily chart shows signs of indecision in the market place. 
  • October US Nonfarm Payrolls are expected to fall on General Motors strike.
  • A below-forecast US wage growth could yield an inverse head-and-shoulders breakout in EUR/USD.

The EUR/USD market seems to have turned indecisive ahead of the all-important US Nonfarm Payrolls report, which is expected to show the job growth slowed in October.

Doji candle

The common currency on Thursday witnessed two-way business, but ended on a flat note, forming a Doji candle on the daily chart. That candlestick pattern represents indecision in the market place.

Also, the pair has formed an inverse head-and-shoulders pattern on the daily chart with the neckline resistance at 1.1184.

Focus on Payrolls

The data due at 12:30 GMT is expected to show the economy added 84,000 jobs in October, having added 136,000 jobs in September. The unemployment rate is expected to rise by 0.1% to 3.6%.

Average hourly earnings are forecasted to climb 0.3% on the month and 3.0% on the year after no monthly gain in September and a 2.9% annual increase. The labor force participation rate and the average weekly hours are expected to remain at 63.2% and 34.4%, respectively.

Note that, October payrolls are expected to fall on General Motors strike. The decline in the jobs, therefore, will likely be viewed as a temporary development and may not hurt the US Dollar.

The greenback, however, will likely face strong selling pressure, helping EUR/USD scale resistance at 1.1184 in a convincing manner if the wage growth figure prints well below estimates. A big drop in earnings will likely put pressure on the Fed to go for another rate cut in December or January.

A close above 1.1184 would confirm an inverse head-and-shoulders breakdown and open the doors for 1.1489 (target as per the measured move method).

EUR/USD could drop below key support at 1.1131 if the US wage growth numbers blow past expectations. At press time, the pair is trading at 1.1166, representing a 0.11% gain on the day. 

Technical levels

EUR/USD

Overview
Today last price 1.1166
Today Daily Change 0.0012
Today Daily Change % 0.11
Today daily open 1.1154
 
Trends
Daily SMA20 1.1074
Daily SMA50 1.104
Daily SMA100 1.1125
Daily SMA200 1.1199
 
Levels
Previous Daily High 1.1176
Previous Daily Low 1.1132
Previous Weekly High 1.1063
Previous Weekly Low 1.0941
Previous Monthly High 1.118
Previous Monthly Low 1.0879
Daily Fibonacci 38.2% 1.1159
Daily Fibonacci 61.8% 1.1148
Daily Pivot Point S1 1.1131
Daily Pivot Point S2 1.1109
Daily Pivot Point S3 1.1087
Daily Pivot Point R1 1.1176
Daily Pivot Point R2 1.1198
Daily Pivot Point R3 1.122

 

 

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