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Forex pairs in this Article » EUR/USD
FXstreet.com (San Francisco) - The EURUSD finally closed at 1.2970 after bouncing barely 20 pips from December's low at 1.2950. A modest short covering boost late in the session following the 135 pips collapsed from 1.3085 early in the session.

The euro weakened sharply on Thursday and broke below the 1.3000 psychological level versus the dollar after the ECB decided to leave rates unchanged but it did lower its growth and inflation forecasts, while President Draghi said that policy makers considered cutting interest rates. The "pessimistic outlook on Europe's growth potential is making it difficult for traders to be bullish the Euro," comments Richard Lee, FXstreet.com's analyst. "The sentiment has traders and technicians eying the 1.2900 as the next viable support barrier."

In the short-term, the bias has turned to the downside for the cross, with 1.2950 as immediate support. Once below the pair could accelerate toward 1.2900. On a wider view, the pair is staging a fresh pullback within its its broader 1.2660/1.3170 range, where it has traded since early September. The pair now needs to regain the 1.3000 mark to ease the bearish pressure.

On the middle term, the Bank of Tokyo Mitsubishi UFJ team believes that the EURUSD forecast ahead looks neutral. They believe that the Euro is struggling for direction like most other currencies heading into year end, with EURUSD still consolidating between 1.27-33.

On the other side, the TD Secutities team argues that since Draghi noted the ECB's 'wide discussion' on rates today, we've seen the EUR trek lower, slipping below 1.30, bunds bull steepen, and the July eonia forward rate turn negative as further cuts look increasingly likely. "We may see the moves in rates extend further, as markets have more time to mull over the implications of today's ECB's meeting", they add.

Focusing Non Farm Payrolls

The US Department of Labor is scheduled to release the November employment report with its so-called Non Farm Payrolls numbers. Market expectations are around 93.000 payrolls as balance in November. Richard Lee, FXstreet.com analyst, believes that "traders should expect an above 90-95,000 release to lend some support for the US dollar across the board."

Katarzyna Komorowska, FXstreet.com analyst, states that analysts are divided. "The majority opts for a result in the range of 101-150K, which is considerably below the previous reading of 171K. They also believe the unemployment rate should stay unchanged at 7.9% or tick up slightly to 8%," Komorowska points.
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