EUR/USD Badly Positioned for the NFP

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Close to the release of the all-important Non-Farm Payrolls, the Euro got some bad news and is now closer to the bottom of the range. Here’s an update.

The European Unemployment Rate disappointed with a rise to 10%. This rise was worse than early expectations for a rise to 9.9%. We also found out that last month’s figure was already at 9.9%. The figure was revised from 9.% to 9.9%.

Update: NFP fell by 85,000 – disappointment. But last month’s figure saw a rise of 4,000 – the first in two years. EUR/USD is rising but hesitating. Here’s my reaction post: US Gained Jobs In November – Dollar Bulls Not Giving Up

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This isn’t another disappointing figure. This double digit unemployment rate weighs heavily on Europe, especially on its flanks. Spain’s unemployment rate is at almost 20%. But this isn’t only a Spanish problem. Every 1 in 10 is unemployed. This figure perfectly matches the current American unemployment rate.

Technical Look: EUR/USD is now trading under 1.43, very far from the resistance range at 1.4444 to 1.4480. In the past weeks, EUR/USD was supported by 1.42 and resisted by this range. It’s now closer to the bottom of the range. More on the pair in the EUR/USD forecast.

Also German Industrial Production, released just now, disappointed with a small rise of 0.7%, less than 1.1% that was predicted. EUR/USD failed to break earlier this week, as it got good figures.

With these bad numbers, it’s weakness is clearly seen. EUR/USD needs a very bad Non-Farm Payrolls figure in order to rise.

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

14 Comments

  1. Noor Mohamed on

    A very interesting observation. Ths US economics fundementals is still weak as far as , the WAR in IRAQ, AFGHANISTAN and most probably IRAN are concern. These wars drained the US Economy and it affect its allies as well. Back at home, the Fed Reserve are giving out goodies in support of Ben Bernanke second term in Fed Reserve. What is going on is a short terms gains with a huge iceberg waiting to hit the US economy from the bottom. The fact that the US Dollar is dependent on positive economic news is a real indicator that investor does not have any confidence in the DOLLAR on its own. The herd is moving with dollar apparently based on economic indicators taking advantage of the short term effect. That affect is beginning to wade off as for the past 2 weeks, positive news does not really move the DOLLAR that far…Today will be a decisive day for the whole scam to be out in the open…Employment data is no indicator for an overall economic health of a nation. The US expenditure, greatly overwhlmes its income..Subsidizing the WAR in the Middle East alone is killing its economy…In the home ground, if the income data shows improvement but yet still the expediture is far more bigger which creates huge deficit in the US economy…For the US economy to recover , it must first STOP the WAR in the Middle East…Restructure its banking system…Generate income through genuine business endeavour and reducing cost off its products and services..The next bubble to explode is the derivatives market and as such, the US Dollar is a determinant for a time bomb waiting to explode..Seek ye the truth and the truth shall set you free and apparently no one listen to Jesus and I am a Muslim saying it…Good Luck..

  2. I see no reason to complicate things. Depending on the outcome of the NFP adjust your trades, and trade the News per se.
    The resistance levels come into play much later, then most have already taken advantage of the spikes.

    1. Trade the news short term.
    2. After 2 hours check for long term direction.

    Remember, most institutions want the dollar strong.

    Good Trading

    Resi2000

  3. Thanks for your comment Resi. I think that some pairs are impacted more than others. The Euro is on the weak side of currencies at the moment…

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