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Euro Trading Around LB in Expectation of NFP

Hourly

Due to German bond growth on Thursday, the eurobulls managed to complete the final triangle at a maximum of 1.1379. By the close of the American session, the euro had fallen to 1.1235. Pressure on the European currency came in the form of a reduction in the bonds’ yield and also with the publishing of strong data for initial US unemployment benefit requests. Before the Friday report, a fixing of profit has taken shape from long positions.

The yield on the 10-year German bonds fell from 0.830% after reaching 0.998%: a fall of 16.7%. The bonds were snapped up as a result of the Greek government coming to an agreement with its creditors about delaying their repayments. The Bank of Greece requested that the IMF allow them to amalgamate their debt payments for the month in to one single transfer. As such, today they will not be paying the 300 million euros today.

The amount of applications for unemployment benefit in the US was 276,000 in the week ending 30/05 (forecasted: 279,000, previous: 284,000).

In Asia the eurobulls tested the solidity of 1.12. The intraday minimum fixed at 1.1179. Today is an important day for dollar traders. At 15:30 EET some May labor market data for the US will be out.

I’ve come up with two different scenarios below, depending on how the NFP data turns out. Now the euro is trading around the LB at 1.1217. I’m inclined to believe it will renew to 1.1240 and then see a flat until 15:30 EET. If the definitive NFP data differs significantly from the forecasts, it might be worth waiting for fluctuations from the LB to the very edges of the MA channel (U3 or D3). Now let’s consider the daily.

Daily

Due to the growth on the German 10-year bonds, the euro/dollar saw a rise to 1.1379. If we look at the trend formed after close, the eurobulls had overcome it, but at close they hadn’t managed to break the trend that was present throughout the day. When the yield fell by 16%, the euro/dollar fell. In the end, a pinbar that had started in the morning was formed (a falling star).

After the pinbar the euro/dollar should return to 1.1111, but that may not be the case. Labor market values for the US will be out at 15:30. It will put everyone in their place. If it turns out as forecasted or better, the euro/dollar will return to 1.11 today. Now let’s have a look at the weekly.

Weekly

The euro/dollar hit 1.1379 but didn’t manage to strengthen on it: the rate returned to 1.12. Today’s close will be very important. If the euro/dollar will close around 1.11 after the NFP, next week we will be returning to 1.0818. That’s the current deal. The main trend line hasn’t been broken. On the monthly graph: trend down.

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