Leading U.S. jobs reports are coming up, and these might be strong catalysts for the Greenback ahead of the NFP.
I’ve got this neat EUR/USD setup on my radar, but let’s first take a look at the top headlines during the earlier trading sessions:
- U.S. President Biden projects that vaccines will be enough for every U.S. adult by May
- New Zealand ANZ commodity prices up 3.3% from earlier 4.3% gain
- Australian economy expanded 3.1% vs. projected 2.5% GDP growth in Q4 2020
- BOJ policymaker Kataoka calls for new strategy to hit inflation targets
- Australia’s Q3 2020 GDP figure upgraded from 3.3% to 3.4%
- Chinese Caixin services PMI fell from 52.0 to 51.5 vs. 51.6 forecast
Upcoming Potential Catalysts on the Economic Calendar:
- U.S. ADP non-farm employment change at 1:15 pm GMT
- U.S. ISM services PMI at 3:00 pm GMT
- U.S. crude oil inventories at 3:00 pm GMT
- BOE MPC member Tenreyro’s speech at 4:00 pm GMT
- FOMC member Evans’ speech at 6:00 pm GMT
- U.S. Fed Beige Book due at 7:00 pm GMT
- RBNZ Governor Orr’s speech at 8:00 pm GMT
What to Watch: EUR/USD
This pair recently fell through a rising trend line support, indicating that a reversal is in the works. Price might need to make a retest to gather more selling pressure, though.
The handy-dandy Fib tool shows that the former trend line coincides with the 61.8% level and an area of interest, so sellers might be hanging around right there. Technical indicators add confirmation that resistance levels are more likely to hold than to break.
In particular, Stochastic is already indicating overbought conditions or exhaustion among buyers. Meanwhile, the 100 SMA just completed a bearish crossover to show that downside momentum could gain traction.
Dollar traders might take cues from the ISM services PMI and ADP non-farm employment change figures lined up, as these might serve as previews for the NFP due later on. Analysts are expecting to see a slight pickup in hiring, which could be bullish for the Greenback.
Also, optimism that there will be enough vaccines for the U.S. adult population by May could be enough to keep the dollar supported versus the euro, as the region is still undergoing issues in its vaccine rollout program.