FXstreet.com (Barcelona) - Euro bulls took another hit yesterday
after the FOMC minutes showed an unusual hawkish tone, hinting the
likeliness that the ongoing quantitative easing could well be
halted or slowed down before year-end, as many of the Committee
members have suggested. This leaves no doubts that t the US economy
is expected to strengthen during the present year, supporting the
outlook of a bullish greenback for upcoming periods.
… NFP would be the judge
The EUR/USD remains practically in autopilot in the vicinity of the
psychological level at 1.3000 so far, trading in an unusual narrow
range, ahead of the results out of the US labour market data.
Although the recent discrepancies between the ADP report and the
more relevant NFP have led investors to avoid making projections on
the latter in light of the private sector's job creation, traders
could not help to speculate on the same shocking result in today's
NFP reading, specially after Thursday's +215K raise in the ADP
Prior surveys expect the US economy to add 150K jobs during the
month of December and the jobless rate to stay put at 7.7% in the
same period. Therefore, it seems fair to infer that a print at the
median or any surprise above it could well be supportive of risk
appetite, in which case the single currency would be benefited.
However, the same result might be a two-edged sword that should be
very carefully taken into account by euro traders: if December's
NFP exceeds expectations then the market is moving in the direction
of the last FOMC minutes, indicative as well of better prospects
for the US economy growth… and backing USD strength.
When comes to technical studies, and assessing the recent EUR/USD
price action, analyst Karen Jones at Commerzbank comments,
"Intraday rallies should now find resistance at 1.3158/93 and we
suspect will remain capped by 1.3310. This will leave attention on
the 1.2930 2012-2013 uptrend. We note the divergence of the weekly
RSI and we continue to suspect that the market has topped, a close
below the 1.2930 uptrend is needed to confirm".