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Trade Setups in EUR/USD, USD/JPY, AUD/USD for ECB, NFPs

Trade Setups in EUR/USD, USD/JPY, AUD/USD for ECB, NFPs

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- EURUSD levels to watch: 1.3635-1.3700.

- USDJPY funnels into triangle apex - like a coiling spring.

- AUDUSD false break?- threatens uptrend from early-March.

Traders lulled into a daze by the low volatility ought to grab a coffee for this morning - volatility should be back with a vengeance. Thanks to the holiday-shortened week for the July 4 US Independence Day, market participants have been gifted with the European Central Bank rate decision and the release of the US Nonfarm Payrolls report coming within less than an hour of one another.

Of the two, the ECB rate decision will be the less exciting, given the likelihood that the ECB sits pat after unveiling a plethora of measures last month; simply not enough time has passed for policymakers to determine if said measures have proven effective. ECB President Draghi's press conference, in lieu of substantive action, will carry additional weight.

With the June US ADP Employment report showing jobs growth north of +280K (which only tallies private payrolls, not government jobs), there is a distinct possibility that the June US NFP figure comes in above +250K. Considering that the Federal Reserve's tone has started to diverge from incoming economic data (the Fed is behind the curve, as they say), a strong June jobs report could be the spark the buck needs to move off of its lowest levels since October.

See the video above for details on trade setups in EURUSD, EURGBP, AUDUSD, and USDJPY. I'll be talking about all of these potential policy changes and their impact on the Euro and other currencies today for live coverage of the ECB rate decision, starting at 11:30 GMT in the DailyFX Live Trading Room.

Read more: July Forex Seasonality Foresees More Dollar Weakness versus Aussie, Pound

--- Written by Christopher Vecchio, Currency Analyst

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