EUR/USD: 1.3150Despite some volatility, on rumours that the recession in the EU could trigger a rate, cut, Mario Draghi admitted that such an outcome was not discussed at the ECB board meeting, and the Euro is unchanged on this time yesterday. He went on to say that he expects growth in the EU to continue, albeit at a gradual rate, but down side risks still exist.
Elsewhere, the market has largely gone on hold prior to the release, later today of the US NFP/Unemployment data. Following yesterdays ADP numbers, expectations have been revised lower to +160K. The Equity markets are wary and have generally closed lower – Dax -0.25%, CAC -0.09%, S+P -0.75%. Today’s release of the US Non Manufacturing ISM data did not help, with the reading coming in a fair bit weaker than expected.
Aside the NFP, the major factor over the next couple of days will be the French and Greek elections, the results of which we will know early next week.
The Euro made a brief spike low to 1.3095, before an equally sharp rally to 1.3180, and settling somewhere in the middle. While the hourly charts have largely unwound their oversold status, the 4 hourlies continue to warn of further tests lower. Below today’s low is the 18 April base, at 1.3056, while the topside is initially at today’s high, 1.3180 and then at 1.3215 and 1.3270.
We are not going to do a great deal until the data, and if it is as soft as expected we should not expect to see the dollar gain any ground. So overall look for the 1.31/1.32 range to continue. The charts remain pretty choppy and it is not easy at present to read too much into them. Overall 1.30/1.33 remains the wide range, so use these as parameters, without too much expectation of a move outside of this, any time soon.
Before the NFP, EU data will give us EU/German Services PMI, EU Retail Sales,
