EUR/USD: 1.2985The Euro is lower today, and the US$ generally a bit stronger, following the improved ADP report that showed that private sector jobs in US grew 198k in February, compared to the expected 168k. At the same time, January's figure was revised up from 192k to 215k and the market is looking forward now to a good NFP number on Friday (exp +160K).
Before then we have the ECB rate decision later today, with the chance of a cut from the current 0.75%, and close focus will be paid to the tone of Mario Draghi's Press Conference. It looks as though the market thinks he is going to be pretty dovish, and following today's Q4 EU GDP which contracted by 0.6%, would probably signal further monetary easing ahead, in order to attempt to kick start the economy.
Technically the Euro is at session lows (1.2985). Although we are back below 1.3000, we are currently holding on above the recent low at 1.2965 and remain firmly within the descending channel.
The 4 hour MACD's do look as though they could be running out of a bit of downside momentum. However the dailies are still pointing lower and another push to the downside looks to be on the cards and if we can get below 1.2965, the next target will be 1.2915, the 76.4% Fibo support of 1.2660/1.3710. If we trade below this, 1.2875 (50% of 1.2042/1.3710) lies ahead of the channel base at 1.2860 and then the H/S objective at 1.2840, which in turn, is backed up by the 200 DMA at 1.2838, so the support in the 1.2840/75 area is going to be strong and would suggest a good area to buy back some shorts.
If Mr. Draghi is less dovish than expected, a turn higher would now see short term offers at 1.3020 with stronger resistance at 1.3070, which stopped the Euro in its tracks earlier in the session. Above this, although a little unlikely, would see further sellers at the 100 DMA, at 1.3118 and possibly 1.3140 (23.6% of 1.3710/1.2966).
Stay flexible today and wait for Mr Draghi to give us a clue, but bias is to prefer to sell into strength for medium term move into the strong support around 1.2850.
Economic data highlights will include:
ECB IR Decision, APP Facility, US Jobless Claims, Trade Balance
