- EUR/USD formed a long-legged Doji yesterday.
- US Nonfarm Payrolls awaited before initiating new positions.
- Disappointment in the job numbers could trigger the next wave of dollar selling.
EUR/USD fell on Thursday to touch 1.1789 and then rose back to 1.1850 in the European trading. The fall and rise of the pair carved out a long-legged Doji candle, meaning the immediate bearish bias has been invalidated and confirmed 1.1789 as the strong support for the bears to challenge.
Investors Eyeing NFP Report
Markets expect to see an addition of 1,400K jobs in August in the Nonfarm Payrolls due today at 12:30 GMT; in July, the US economy had added 1,763K jobs.
The unemployment rate is expected at 9.8 Percent from 10.2 Percent previous; the annualized growth in Average Hourly Earnings expected at 4.5 Percent, slower than 4.8 Percent clocked earlier.
Below-forecast numbers are bound to affect the market more than any upside surprises, according to analysts who see the market sentiments turning, and the uncertain economic outlook worrying the investors in case of a miss.
A below-forecast reading, being dollar bearish will be good for the EUR/USD and will propel the pair towards 1.19. On the other hand, a surprise will not be very dollar bullish as the bounce might get attributed to the seasonal factors – the August numbers almost always get revised in the later dates. Another aspect of robust data is the US dollar demand getting hit due to pro-risk sentiments in the market.
If the EUR/USD falls below 1.1789, Thursday low, then it would mean a continuation of the sell-off from the recent high above 1.20.
The US economic docket focuses on the NFP while Europe has a lighter calendar with just German July Factory Orders due at 06:00 GMT. The factory orders might not have a significant impact unless there is a huge surprise.
The EUR/USD was trading at 1.1850 without much action on either side.
