Pound's implosion during the past Asian session, took its toll over the common currency, resulting in the EUR/USD pair falling to its lowest in two months, down to 1.1104 after the European opening, and holding around 1.1120, the base of its latest range. And is Nonfarm Payroll's Friday. Indeed, the market is still trying to explain what happen with the Pound, whether if it was an algo thing, or a far finger, but the fact is that the dollar ended up benefiting from the move, up against most of its rivals, amid at a more moderated pace.
The US will release its September employment report, later on, today, and economist are expecting the country to have added around 172,000 new jobs in September following a 151,000 increase in August. Also, the unemployment rate is forecast to remain at steady 4.9%, while average hourly earnings, year-on-year, are predicted to rise 2.6% year-on-year in September after a 2.4% gain the previous month and to advance up to 0.3% in the month from the disappointing 0.1% in August.
The Nonfarm Payroll report has long lost its charm, or better said, its ability to trigger wild moves, particularly in the USD against its European rivals, unless the final results print overwhelming divergences when compared to market expectations. But today, things could be a bit different for the EUR/USD pair that has been stuck range-bound for over six weeks and given the resurging dollar's demand.
Technically bearish, additional declines will depend exclusively on a strong reading. The pair has an immediate support at 1.1080/90, a daily ascendant trend line coming from November 2015 low of 1.0505. Should the price break below the mentioned line, there's scope for a steeper decline, down to the 1.1000/40 region, with a weekly close around this last opening doors for a downward extension towards 1.0850 next week.
If the pair recovers ground, however, 1.1160 is the immediate resistance, followed by the 1.1200 figure. Gains beyond this last seem unlikely, yet an extremely disappointing employment report can take the pair up to 1.1245.
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