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Bulls take to the sidelines

The EURUSD pair closed slightly lower on Thursday, August 5, down 0.02% to 1.1834 on the day. Trading saw erratic intraday fluctuations. Despite recovering to 1.1857, the bulls failed to hold on to gains by the close. The price action dropped to 1.1831 by the end of the European trading session. Traders now await the NFP report on the US labor market, so activity remains low-key.

Today’s macro agenda (GMT +3)

  • 10:00 Switzerland: SNB foreign currency reserves (July)
  • 15:30 US: non-farm payrolls, unemployment rate (July); Canada: employment change and unemployment rate (July)
  • 17:00 Canada: Ivey PMI (July)
  • 20:00 US: Baker Hughes weekly oil rig count
  • 22:00 US: consumer credit change (June)
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Current outlook

Major currencies have been trading in the red during APAC trading, with the single currency dropping to 1.1819. By the time of writing, the euro was changing hands at 1.1824. The pair is locked in a sideways trend ahead of today’s NFP release. The euro took a hit on Wednesday following remarks by Fed Vice Chair Richard Clarida. The key pair is seeing subdued trading as the July payrolls numbers remains a wildcard.

If the NFP reading comes in strong, the market will start to price in tapering and this will lend support to the dollar. Conversely, if the report disappoints investors, the dollar will come under renewed pressure.

Friday’s resistance zone is 1.1845-1.1850. If the pair closes above 1.1850 today, EURUSD will be back in rally mode. However, if 1.1815 is breached to the downside, the pullback will pick up to 1.1795, with aggressive selling to 1.1775.

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