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Forex News: Euro Loses Its Grip Ahead of US Jobs Report

Forex News: Euro Loses Its Grip Ahead of US Jobs Report

Benjamin Spier, Technical Strategist

Ever since yesterday’s release of the minutes from last month’s Fed meeting, the forex markets have seen a lot of confidence in the US Dollar. Since then, the Euro has fallen over 100 points against the US Dollar and is now testing the key 1.3000 figure.

The drop continued in today’s European session and seemed relatively unconnected to economic releases. Out of all the releases, the Euro-zone composite output index seemed to have the biggest impact on price action. The output index was revised slightly lower from an earlier estimate.

Also announced today, Euro-zone inflation remained at 2.2% in December. In the UK, the services PMI disappointed expectations, but did not have an effect on Sterling trading.

Also in today’s trading, the UK 10-year bond yield briefly climbed above the French benchmark yield for the first time since April 2011. This resulted from a combination of rising French bond prices and declining UK bond prices. UK’s benchmark yield is now at 2.10% and the French yield is at 2.13%.

In Japan, Chief Cabinet Secretary Suga said he wants to give priority to someone who thinks like PM Abe for the role of the next BoJ governor. Governor Shirakawa will end his current term on April 8, and Abe has said that he wants more monetary stimulus and an inflation target. The Yen continued to decline in today’s session, and USDJPY set a new 2 year high above 88.00.

EURUSD is currently trading slightly above 1.3000, a level which the currency hasn’t broken in three weeks and could continue provide support here. Resistance might continue to be provided at 1.3158.

In the US session, forex traders will be watching the US change in nonfarm payrolls and unemployment rate, both will be released at 13:30 GMT. Follow along live with Currency Analyst Christopher Vecchio or read Ilya Spivak’s analysis of how the USD might react to the data.

EURUSD Daily: January 4, 2013

Euro_Loses_Its_Grip_Ahead_of_US_Jobs_Report_body_eurusd_daily_chart.png, Forex News: Euro Loses Its Grip Ahead of US Jobs Report

--- Written by Benjamin Spier, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.