EUR/USD Nov. 7 – Downed by Draghi, awaiting a raise

EUR/USD  is down to new lows, trading around 1.24 after already falling even lower. The euro was hit hard by Mario Draghi, which had a determined dovish message, defying the discontent and committing to expand the ECB’s balance sheet by a large scale. The focus now shifts to the US with the “king of forex trading”: Non-Farm Payrolls. Expectations are high and also is the dollar. Can the pair fall even lower or will any minor disappointment allow for a recovery?

Update:  Non-Farm Payrolls only 214K but unemployment rate 5.8% + good internals – dollar up

Here’s a quick update on technicals, fundamentals and sentiment moving the pair.

• Asian session: The pair managed to climb from support at 1.2360 towards 1.24, but still down..
• Current range:  1.2360 to 1.2440.

Further levels in both directions:

• Below:  1.2360, 1.2250, 1.2140, 1.2042.
• Above: 1.2440, 1.25, 1.2570, 1.2620 and 1.2660
• 1.2440 is an old line  and now switches to resistance.
• 1.2360 is key support.

EUR/USD Fundamentals

• 7:00  German Industrial Production. Exp. 2.1%, actual 1.4%, but with an upwards revision.
• 7:00 German trade balance. Exp. 18.3 billion, actual 1.8.5 billion.
• 7:45 French industrial output. Exp. -0.1%, actual 0%.
• 7:45 French trade balance. Exp. -5.2, actual 4.7 billion.
• 13:30 US Non-Farm Payrolls. Exp. +235K. See how to trade the NFP with EURUSD.
• 13:30 US unemployment rate. Exp. 5.9%.
• 13:30 US Average hourly earnings. Exp. +0.2% m/m, 2% y/y.
• 13:30 US participation rate. Last: 62.7%.
• 15:15 Fed Chair Janet Yellen talks
• 19:00 US Consumer Credit. Exp. 16.6 billion.
• 19:30 US FOMC member Daniel Tarullo talks.

* All times are GMT.

For more events and lines, see the  Euro to dollar  forecast.

EUR/USD Sentiment

• Determined Draghi: ECB president Mario reasserted his leadership by bringing forward a unified message about readiness to do more to battle low inflation, as the euro-zone faces a potential third recession. The commitment to bring the balance sheet towards the 2012 levels has now entered the introductory statement, and that in turn was signed unanimously by all ECB members. This put to an end the reported discontent within the bank.. More: Draghi Did It Again; EUR/USD En-Route To 1.20 – Danske, and also  Expect Draghi To Prevail; Staying Short EUR/USD targeting 1.18 – BNPP.
• High hopes for NFP: See how to trade the NFP with EUR/USD. Indicators leading up to the Non-Farm Payrolls report have been quite positive, to say the least: ADP NFP beat expectations with +230K and an upwards revision. And while the  ISM Non-Manufacturing PMI missed on the headline, the employment component is at the highest since 2005. Also jobless claims continued printing low numbers: 278K is the latest read and the 4 week moving average stands at 279K, the lowest since the year 2000.
• Hawkish Fed: The Fed ended QE and also  sounded quite bullish about employment, acknowledging “solid job gains”. In addition, Yellen and her colleagues were not  too worried about  inflation and there was one dovish dissenter for a change. All this supported the greenback.

Subscribe to our podcast  on iTunes.