5 Dec 2014
EUR/USD awaits NFP – TDS
FXStreet (Barcelona) - The TD Securities Research Team notes that the US NFP outcome may make or break the near-term potential for EUR/USD to rally, and sees the pair diving further if the NFP data beats consensus.
Key Quotes
“There was really little to get too optimistic about with regard to the EUR outlook though—economic projections were reduced sharply and have not fully factored in the latest oil price drop. Still, the bounce in EURUSD from sub 1.23 levels Thursday overall gives the impression of a market that may squeeze higher still in the short-run (technically, the market formed a rare, EUR-bullish key reversal day overall).”
“This morning’s US NFP data may make or break the near-term potential for EURUSD to rally. TD is above consensus, looking for a robust number mainly on the back of seasonal adjustmen factors at play, but there have been warnings from the ISM Non-Manufacturing Employment sub-component and the ADP data to alert the market to the risk of a downside surprise as well.”
“A sub-200K outcome would give the EURUSD rebound a little more oxygen while something closer to TD’s call will put renewed downward pressure on the EUR. For now, we rather think the EUR has done enough to stave off a year-end slump; we expect firm support in the low/mid 1.22 area while a disappointing NFP outcome today may see gains extend towards 1.26. But overall, with the ECB poised to ease more aggressively in Q1, short-term EUR gains are a selling opportunity.”
Key Quotes
“There was really little to get too optimistic about with regard to the EUR outlook though—economic projections were reduced sharply and have not fully factored in the latest oil price drop. Still, the bounce in EURUSD from sub 1.23 levels Thursday overall gives the impression of a market that may squeeze higher still in the short-run (technically, the market formed a rare, EUR-bullish key reversal day overall).”
“This morning’s US NFP data may make or break the near-term potential for EURUSD to rally. TD is above consensus, looking for a robust number mainly on the back of seasonal adjustmen factors at play, but there have been warnings from the ISM Non-Manufacturing Employment sub-component and the ADP data to alert the market to the risk of a downside surprise as well.”
“A sub-200K outcome would give the EURUSD rebound a little more oxygen while something closer to TD’s call will put renewed downward pressure on the EUR. For now, we rather think the EUR has done enough to stave off a year-end slump; we expect firm support in the low/mid 1.22 area while a disappointing NFP outcome today may see gains extend towards 1.26. But overall, with the ECB poised to ease more aggressively in Q1, short-term EUR gains are a selling opportunity.”