• 
• See all for FXstreet.com
• View Print Version

FXstreet.com (Córdoba) - The US dollar is reversing some of yesterday's gains after the US nonfarm payroll report which came in slightly above expectations, but was neutral enough to offset the hawkish tone of the Fed minutes.

The greenback strengthened on Thursday after the FOMC minutes showed several policymakers thought it would be appropriate to slow or stop the Fed's bond purchases programs before the end of 2013. USD remains firmer overall, although the euro has managed to erase intraday losses and trades little changed, while US stocks are mixed.

"Looking ahead, the reaction to today's jobs report suggests scope for a brief period of relative market calm at the start of 2013, which could favor equities and foreign currencies", says Nick Bennenbroek, Head of Currency Strategy at Wells Fargo Bank. "That benign backdrop probably won't last long however. Within a few weeks the market's attention will likely return to the next round of U.S. budget talks, at which point equity market and foreign currencies will probably find the environment much more challenging".

Meanwhile the euro…

The shared currency managed to reverse early losses versus the greenback after the NFP data. EUR/USD bounced from a 3-week low of 1.2997 and climbed toward the 1.3060 zone before finding resistance. It was last at the 1.3035/40 area, virtually unchanged on the day.

Technically speaking, the outlook has turned more negative, although short-term the EUR/USD is correcting from oversold levels. A break below 1.3000 should signal a bearish continuation, while only a regain of the 1.3065/1.3100 area would ease the immediate pressure.

"This week's EUR/USD has reversed to-but not clearly broken-the neckline of the head & shoulders on the weekly chart", says the TD Securities team. "With that in mind, whether this week's close is above 1.3010/20 is an important signal for the trend in the coming weeks/months".

Related Forex and Currencies Articles

• 
  Forex - USD/JPY falls on yen depreciation concerns
  5/19/2013 07:23 PM
• 
  Forex - AUD/USD higher despite Goldman’s dire call
  5/19/2013 06:23 PM
• 
  Gold slides as bearish bets jump
  5/19/2013 05:24 PM