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EUR/USD  continued trading on low ground, holding on to the 1.31 line in the calm before the storm. It is still licking its wounds from the double damage it received on Thursday from both Draghi and the excellent services sector PMI. And now, all eyes are on the Non-Farm Payrolls: not only is this figure the king of forex, but it probably the decisive figure for QE tapering in September. Get ready to rock and roll.

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

  • In the Asian session, EUR/USD  remained stable and quiet above 1.31.

Current range: 1.3100 to 1.3175.EUR USD Technical view September 6 2013 before non farm payrolls forex trading currencies

Further levels in both directions:

  • Below: 1.31, 1.3050  and  1.30.
  • Above: 1.3175, 1.3240, 1.33, 1.3350, 1.3415, 1.3450, 1.3520, 1.3590 and 1.37.
  • On the upside,  1.3240 proved itself as support.
  • 1.3100 is holding on so far, but the pair is getting close.

EUR/USD Fundamentals

  • 6:00  German Trade Balance. Exp. +15.9 billion, actual 14.5 billion.
  • 6:45 French Trade Balance. Exp. -4.5 billion, actual -5.1 billion.
  • 10:00  German Industrial Production. Exp. -0.3%.
  • 12:00 US FOMC member Charles Evans talks. He is a known dove.
  • 12:30 US Non Farm Payrolls. Exp. 178K. See how to trade the NFP with EUR/USD.
  • 12:30 US unemployment rate. Exp. 7.4%.
  • 17:30 US FOMC member Esther George talks. She is a hawk.

* All times are GMT.

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

EUR/USD Sentiment

  • NFP can put a stamp on tapering: ADP provided an OK beginning,  showing a continuation of the trend. Jobless claims joined in with the same strong and solid data, and the  ISM Non-Manufacturing PMI was a big positive surprise: not only the headline reached the highest since 2005, but the employment component increased to 57.7, reflecting strong growth. All eyes are on the king of forex trading: Non-Farm Payrolls, and the expectations are high. Unless we get an unexpected disaster such as a sub 100K figure, the NFP will likely cement the QE tapering and make a bigger impact on currencies.  See how to trade the NFP with EUR/USD.
  • Only a green recovery in Europe:  ECB president Mario Draghi said he is “not enthusiastic”  about the return to growth and warned about money markets. In addition, the ECB lowered its growth forecast for 2014. A rate cut is still on the cards, and forward guidance is here to stay. On this background, the euro remains weak, and not only against the dollar.
  • Syrian tensions are on the rise: A US military strike seems closer, as the military makes preparations and there are higher chances for an approval from Congress. The story is expected to unfold next week. Only an extreme escalation in Syria can prevent QE tapering.

Further reading: