EURUSD: all eyes on the NFP report

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On Thursday the 5^th of April, trading on the EURUSD pair closed down on the back of a broadly stronger dollar and a rise in US bond yields. The US dollar index’s (DXY) rise was helped along by an easing of tensions in China and the US’s ongoing trade dispute. US authorities have expressed a desire to hold talks. The EURUSD rate dropped to 1.2218. By the end of the day it had recovered to 1.2239.

Day’s news (GMT+3):

• 09:00 Germany: industrial production (Feb).
• 10:00 Switzerland: foreign currency reserves (Feb).
• 10:45 Eurozone: ECB Cœuré speech.
• 15:30 Canada: net change in employment (Mar).
• 15:30 USA: nonfarm payrolls (Mar), unemployment rate (Mar), average hourly earnings (Mar).
• 17:00 Canada: Ivey PMI (Mar).
• 18:15 UK: BoE Governor Carney’s speech.
• 20:00 USA: Baker Hughes US oil rig count.
• 20:30 USA: Fed’s Powell speech.

Fig 1. EURUSD hourly chart. Source: TradingView

From the LB balance line, the euro dropped to 1.2218. In Asia, it’s recovered to 1.2260. Markets are again going through some turbulence after Donald Trump’s latest comments directed towards China. Trump said that he has instructed the US Trade Representative to look at the possibility of introducing further tariffs on up to 100bn USD’s worth of Chinese products.

The US believes that China retaliated unfairly by raising tariffs on US products. The Japanese yen, Swiss franc, and gold have all appreciated as a result and are currently trading up.

This retreat towards the safe havens along with the general uncertainty on the currency market is keeping the market in swing mode. The US employment report set to come out at 15:30 EET as well as speeches from the heads of both the Bank of England and the US Federal Reserve should ensure that volatility remains high. Since it’s payrolls day, I’m not making any predictions.