The Forex markets are quiet this morning aheadof the U.S. Non-Farm Payrolls report for January. Economists are looking for arise of 145,000. A greater number will likely trigger a rally in riskycurrencies.
The Forex markets are quiet thismorning ahead of the U.S. Non-Farm Payrolls report for January. Economists arelooking for a rise of 145,000. A greater number will likely trigger a rally inrisky currencies. A lower than forecast number could support the Dollar. Astrong number is not likely to have that much of a bullish influence on theEuro because of the market’s reaction to Trichet’s comments yesterday.
On Thursdaythe Euro fell 1.2% against the U.S. Dollar. As expected, the European CentralBank left its benchmark bank rate unchanged at 1%. The sell-off in the Euro wastriggered by comments by ECB President Jean-Claude Trichet that traders took tomean the central bank is less worried about inflation risks as anticipated.
The markethad priced in two rate hikes this year so Trichet’s dovish spin took a lot outof the recent rally. Technically, the current uptrend is being threatened. Abreak through the swing bottom at 1.3570 turns the main trend down. Weakness isbeing indicated this morning because a Fibonacci level at 1.3744 failed to holdas support. Currently, uptrending Gann angle support is preventing a hard breakat 1.3633. This is followed by a 50% level at 1.3577.
Should thesupport levels fail and the trend turn down, expectations are for the market tocontinue lower until the Euro completes a full retracement of the 1.2873 to1.3861 rate to 1.3367 – 1.3250.
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