EUR/USD: 1.2940Despite a better than expected ADP employment report from the US that showed 158k growth in private sector jobs in October (against expectation of 137.5k,), the Eur/Usd continued to move sideways, waiting for the NFP later on today, and more importantly for the US election on Tuesday.
On top of the jobs data, the US ISM manufacturing PMI unexpectedly rose to 51.7 in October, while Consumer Confidence rose to 72.2 in October providing a boost for the equities markets and generally underpinning risk sentiment, although doing very little for the Euro.
The Euro was capped after a Greek court ruled that pension reforms required by international lenders may be unconstitutional, increasing concerns over the government's ability to implement the austerity measures needed to secure further aid.
We now have to sit and wait for the NFP/Employment data which has an expectation of a rise of 125K, following on from Septembers 114K. There is little point in being too involved before then, although all the European PMI's do get released today which will provide some possible volatility.
Little has changed from a technical point of view, with the Euro firmly stuck in its range. Today's high has been 1.2982, well below yesterdays 1.3020, and the 25 Oct high of 1.3022. This will therefore be the first hurdle to overcome, beyond which lies the long term descending trendline now at 1.3090, and which should prove strong. A break would see the 17 Oct, 1.3140 high, which is also 38.2% of 1.4939/1.2042, but it would take a pretty good NFP figure to get the Euro up here.
On the downside, the Euro continues to see good bids in the 1.2880/90 range, below which are stops that could take the Euro down to the 200 DMA, now at 1.2830. This has held firm on previous attempts and it sits above the 1st Oct low at 1.2802, so should be strong at the first crack at it. A break would suggest further declines towards 1.2740/10 area, and it would take a very poor NFP reading to head down to this level.
The shorter term indicators are flat but the dailies still suggest that any pressure for the Euro will be mildly to the downside. Stay flexible and find something else to do right now. It is going to be dead before the data.
