Euro Traders Eye Key U.S. Employment Report; 1.3076 Significant Pivot Number

Most major Forex markets are trading lower thismorning against the Dollar ahead of the release of the key U.S. Non-FarmPayrolls report for December.

Most major Forex markets are tradinglower this morning against the Dollar ahead of the release of the key U.S.Non-Farm Payrolls report for December. An unexpected surge in the ADP privateemployment data has encouraged analysts to upwardly adjust their pre-reportguesses, leading traders to believe that today’s report will be better thanpreviously forecast.

Earlier in the week a MarketWatchsurvey showed that 143,000 jobs were created in December. Since the release ofthe ADP report, the new survey now indicates that analysts are looking for a175,000 job increase.

Based on the strength in the U.S.Dollar and the equity indices this week, investors have already priced in the adjustment.This means that it may be difficult for a “bullish surprise”. It looks as ifthe report is going to have to significantly beat the pre-report guess of175,000 to drive the Dollar sharply higher and the currencies lower.

The Dollar is expected to tradesteady to lower if the actual number matches the guess. A less than expectednumber could lead to significant profit-taking by long Dollar traders,triggering a strong currency rally. Beating the number by a significant amountis likely to drive the currency futures lower. It looks as if a big roundnumber like 200,000 may be the catalyst the Dollar needs to drive it sharplyhigher against the major currencies.

This week the EUR USD took out asignificant uptrending Gann support angle at 1.3076. A better than expected NFPnumber could crush the Euro, putting it well on its way to a test of the lateAugust bottom at 1.2587. Look for 1.3076 to act as a significant pivot price.If the report misses the estimate then look for the Euro to regain this level,setting up a strong short-covering rally.

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James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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