Could the US jobs report boost EUR/USD?
FXstreet.com (Córdoba) - The US dollar is modestly weaker overall, except against the yen, after events over the last sessions had limited impact on the FX market, and as investors refrain from taking big positions ahead of the next event of risk: the US nonfarm payrolls report.
Even though EURUSD managed to push higher and printed a fresh 14-month high just shy of 1.3600, the cross failed to overtake the psychological level. USDJPY also reached a new 2 ½-year high of 91.41, but the lacks of momentum seems the theme of the day.
What to expect from NFP?
The next key event is tomorrow US employment report, where another steady employment gain is expected. Consensus points to a 160,000 jobs gain in January, against the 155,000 registered last month.
"With respect to the Fed and NFPs, they're nearly one in the same - after all, the Fed has said it will stimulate the economy until the Unemployment Rate falls to 6.5%, on a sustainable basis (accompanied by increased participation rates). But with the labor market improving - the six month average of jobs gain is +159.67K, the highest rate since May, at +175.83K - and the US consumer strengthening, there has been little reason for the Fed to alter its path", says Christopher Vecchio, Currency Analyst at DailyFX.
"In fact, it deemed the slowdown in growth the past few months as 'transitory' - they too are anticipating a stronger economy", Vecchio explains. "A strong NFP figure tomorrow could stoke further gains in the US Dollar as Treasury yields rise; a weak figure at this point isn't priced it".
It remains to be seen whether the NFP report can take the market out of its consolidative stage as it has virtually ignored all the data in recent days, good, bad or neutral. A break above 1.3600 would fuel the positive longer-term bias, with 1.3660 as next major resistance. On the other hand, loss of the 1.3480 level could delay bulls and point for a deeper correction.
Even though EURUSD managed to push higher and printed a fresh 14-month high just shy of 1.3600, the cross failed to overtake the psychological level. USDJPY also reached a new 2 ½-year high of 91.41, but the lacks of momentum seems the theme of the day.
What to expect from NFP?
The next key event is tomorrow US employment report, where another steady employment gain is expected. Consensus points to a 160,000 jobs gain in January, against the 155,000 registered last month.
"With respect to the Fed and NFPs, they're nearly one in the same - after all, the Fed has said it will stimulate the economy until the Unemployment Rate falls to 6.5%, on a sustainable basis (accompanied by increased participation rates). But with the labor market improving - the six month average of jobs gain is +159.67K, the highest rate since May, at +175.83K - and the US consumer strengthening, there has been little reason for the Fed to alter its path", says Christopher Vecchio, Currency Analyst at DailyFX.
"In fact, it deemed the slowdown in growth the past few months as 'transitory' - they too are anticipating a stronger economy", Vecchio explains. "A strong NFP figure tomorrow could stoke further gains in the US Dollar as Treasury yields rise; a weak figure at this point isn't priced it".
It remains to be seen whether the NFP report can take the market out of its consolidative stage as it has virtually ignored all the data in recent days, good, bad or neutral. A break above 1.3600 would fuel the positive longer-term bias, with 1.3660 as next major resistance. On the other hand, loss of the 1.3480 level could delay bulls and point for a deeper correction.
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