Fundamental analytics

EUR / USD: follow non-farm payrolls

EURUSD

The EUR / USD pair completed yesterday's trading in the green zone, responding to the results of the last ECB meeting and Mario Draghi’s comments.

In general, the meeting did not come as a surprise to most investors. The regulator has quite expectedly revised its forecasts for the pace of economic development and inflation for 2019-2021. Only the forecasts for the current year that were revised for the better could be somewhat surprising. ECB economists expect the economy to grow by 1.2%, against 1.1% earlier, and inflation rising by 1.3%, against 1.2% earlier. Forecasts for 2020 and 2021 were revised downwards.

In his speech, Draghi noted that the ECB will keep the deposit rate at -0.4% until mid-2020 and is launching a new lending program for banks to stimulate the eurozone economy in the context of geopolitical uncertainty and increased threats in international trade. In this case, Draghi hinted at a possible reduction in rates, in case of a negative scenario of the situation in the Eurozone.

Today, the focus of the market will be news from the US, where a report is published on the labor market. The mid-week data from ADP showed that the Ministry of Labor report might be worse than expected. Traders in the first place will monitor two indicators - the change in the number of people employed in the non-agricultural sector and the dynamics of the average wage, which can cause the strongest market reaction.

On the chart we see that buyers managed to resume movement up from the previously noted support at 1.1220. But, at the level of 1.1300, the price again met strong resistance and today, most likely, we are waiting for another campaign to 1.1220, and possibly lower. An additional signal for testing this scenario should be a breakdown of the level of 1.1260.

· Resistance levels: 1.1300, 1.1320, 1.1400.

· Levels of support: 1.1255, 1.1220, 1.1180.

The main scenario - a decline to 1.1220 and below.

An alternative scenario - consolidation above 1.1260 and growth to 1.1320.

Today, the main driver of movement in the market will be the report of the US Department of Labor. It is rather difficult to predict the market reaction, therefore we recommend refraining from trading.

 

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