EUR/USD Daily Forecast – Euro Eases Lower Ahead of US Jobs report

US Jobs and PMI Data for Release Later Today

After seeing a strong bid on the back of Wednesday’s Fed meeting, EUR/USD seems to have settled, just below a nine-week high. The pair is likely to see some volatility later in the day as there are several economic releases scheduled for release.

Analysts are expecting the NFP US jobs report to show fewer jobs were created in October compared to the prior month. The ADP jobs report, released earlier in the week, showed 125 thousand people gaining employment last month which was in line with expectations. However, there was a significant downward revision for the prior month.

The expectation for the NFP report is for 90 thousand new jobs in October. Analysts are also looking for the average hourly earnings component to rebound to 0.3% after it fell short of expectations and came in flat last month. The unemployment rate is expected to tick higher to 3.6%.

In addition to the jobs data, manufacturing PMI figures will also be released. It should lead to a volatile session ahead. The markets seem to have lost a bit of confidence in the US economy following the Fed meeting. If today’s data is weaker than expected, we could see the dollar come under a bit more pressure.

Technical Analysis

EUR/USD declined a bit yesterday but was firmly bought to close the session near prior highs. There is a horizontal level at 1.1129 that I have my eye on. Yesterday, the pair bounced slightly ahead of it.

A drop below it could lead to a more sustained correction, although I have a bullish bias at this point and I think the pair will continue to rally.

There is a fairly major hurdle overhead as the 200-day moving average comes into play. The indicator is currently hovering around the 1.1200 mark. It hasn’t been tested since late June, this might be an area where we see a bit of profit-taking.

Bottom Line

• EUR/USD continues to look strong but data later the day will drive the near-term direction.
• Major resistance for the session ahead falls at 1.1200 as the 200 DMA comes into play.