EUR/USD had an exciting Thursday, falling almost to 1.35 and shooting back up and beyond. The ECB announced a historic negative deposit rate and presented a wide range of other measures. However, by closing the door on more cuts, the euro recovered and rallied when the dust settled. And now, the focus shifts to the US, where the NFP is released, carrying somewhat more modest expectations this time.
Here is a quick update on what’s moving the pair.
- EUR/USD was quiet in the Asian session, trading close to the 1.36 line. The pair has edged higher in the European session.
Current range: 1.3650 to 1.37.
Further levels in both directions:
- Below: 1.3650, 1.3615, 1.3560, 1.3515 and 1.3475 and 1.34
- Above: 1.3650, 1.37, 1.3740, 1.3785, 1.3830, 1.3865, 1.3905, 1.3964 and 1.40
- On the upside, 1.3650 is the next resistance line. The round number of 1.37 follows.
- 1.3585 is immediate support. 1.3560 follows.
EUR/USD Fundamentals
- 6:00 German Trade Balance. Exp. +15.1 billion, actual 17.7 billion.
- 6:00 German Industrial Production. Exp. +0.4%, actual +0.2%.
- 6:45 French Trade Balance. Exp. -5 billion.
- 12:30 US Non-Farm Payrolls. Exp. +214K. See how to trade the NFP with EURUSD.
- 12:30 US unemployment rate. Exp. 6.4%.
- 19:00 US consumer credit. Exp. 15.3 billion.
*All times are GMT
For more events and lines, see the Euro to dollar forecast.
EUR/USD Sentiment
- Draghi’s forward guidance backfires: It was supposed to be a blow after blow to the common currency: a negative deposit rate (from June 11th), targeted loans to banks (from September), a preparation for QE and no more SMP sterilization. However, the ECB tweaked its forward guidance and basically said it finished with rate cuts. With a lot of the dovish sting taken out of the equation, the euro recovered quite nicely and even rallied. Will it fall when negative rates come into effect? It is still to be seen. In the meantime, inflation could remain too low despite all the measures and only because of the high exchange rate.
- Lower NFP expectations: The Fed is on a preset course to taper and QE is expected to end in October. Only a huge surprise from the NFP could change the picture. After a strong gain in April, expectations are somewhat lower this time, especially after the weaker ADP report and the only OK PMIs. Nevertheless, volatility is expected.
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