The Euro stands at the back foot on Friday awaiting release of today’s key event – US jobs data. Near-term action remains limited at the upside and capped by falling thick hourly cloud (cloud base is currently at 1.1901). Fresh easing is pressuring daily Kijun-sen support (1.1866), break of which would extend weakness towards strong supports at 1.1822/18 (Thursday’s low / Fibo 61.8% of 1.1662/1.2070 upleg/20SMA). Overall bullish structure is still intact as daily MA’s remain in full bullish setup and Thursday’s strong downside rejection suggested that pullback from 1.2070 peak might be running out of steam. US NFP data are expected to be the key driver today. Growth of US jobs likely slowed in August, according to the forecast for 180K new jobs created last month, compared to increase of 209K and 231K in previous two months. However, forecasted numbers are solid and near monthly average for the year at 184K and release around the forecast would be supportive for Fed to signal the start of reducing its massive portfolio. In addition, release of US ADP private sector jobs data on Wednesday which is usually used as an indication for NFP, showed strong rise in August, jumping to 237K and heavily beating forecast at 183K. On the other side, average hourly earnings are forecasted to rise by 0.2% in August after advancing 0.3% in July and weak numbers in August may sour the overall picture. US unemployment rate is expected to stay unchanged at 4.3% in August. Scenario of better than expected NFP and Average Earning numbers would inflate the dollar and send the Euro below pivotal 1.1820 support, towards next strong point at 1.1662 (17 Aug trough) violation of which would risk stronger bearish acceleration towards 1.1500 zone. Conversely, weak jobs sector numbers in August would boost the single currency for renewed attempt above psychological 1.2000 barrier and retest of Tuesday’s spike high at 1.2070 (the highest since Dec 2014), break of which would signal continuation of broader uptrend and expose next target at 1.2166 (50% of 1.3992/1.0340 descend.
Res: 1.1901, 1.1922, 1.1984, 1.2000
Sup: 1.1866, 1.1820, 1.1800, 1.1740
