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Dollar Surges Against Euro On Jump In NFPs
Written by article default Wednesday, 06 April 2011 11:03
Fundamental Headlines
• U.S. Employment Situation Summary – BLS
• U.S. Jobless Rate Falls to 8.8 Percent – Financial Times
• Nasdaq, ICE Top Deutsche Boerse With $11.3 Billion NYSE Bid – Bloomberg
• Libyan Defections Raise Hopes as Rebels Struggle – WSJ
• Fed Must Not Be ‘Sanguine’ On Rate Hikes: Plosser – CNBC
EURUSD: The EUR/USD pair traded in a tight 20-pip range in the overnight session, though plunged this morning as nonfarm payrolls showed that 216,000 jobs were added to the U.S. economy in March. Still, the EUR/USD pair is unlikely to fall much further as traders turn their eye towards next week’s European Central Bank decision, particularly after data yesterday showed that inflation accelerated at a faster than expected rate in March. The Overnight Index Swaps now show that 131.8 basis points have been priced in over the next 12-months for the currency bloc, with a 143.7 percent chance of a 25-bps rate hike at their next meeting, which is next Thursday.
Taking a look at price action, a key level at 1.4143 appears to be a level of resistance, now that the rising trend line dating back to mid-January has been broken. The trend line coincided with the 20-SMA, further supporting our notion that this level represents a significant level of resistance. The pair has eased off of its push back towards its 100.0 Fibo extension on the November 5 to January 10 move. All key technical levels could be wiped out depending on the European Central Bank rate decision, as well as the ensuing rhetoric; Euro-based pairs will be volatile over the next week.
Written by Christopher Vecchio, DailyFX Research.
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