EUR/USD, GBP/USD and EUR/GBP Forecasts – Currencies Brace for Non-Farm Payroll Friday

EUR/USD Technical Analysis

The Euro initially tried to rally a bit during the early hours on Wednesday, but it gave back those gains. We are currently sitting on the 50-day EMA. This is the time of week when we start to slow down with the Non-Farm Payroll announcement coming out on Friday.

All things being equal, I think this is a bit of a neutral market. Although we are closer to the top than the bottom of the overall range, this is a market that probably continues to chop quite a bit, waiting for that jobs report. If you are a short-term scalper, perhaps this is where you want to live for the next day or two.

GBP/USD Technical Analysis

The British pound has pulled back a bit as we are underneath the 1.35 level again. I think this is a similar situation where we are going to go into a bit of consolidation, basically between 1.36 and somewhere around 1.3450.

This will be interesting to watch because the Bank of England is also cutting rates, but they are doing so in a very slow and steady manner. The US Dollar will be driven by the Federal Reserve and expectations there, with an emphasis on Friday.

EUR/GBP Technical Analysis

The Euro continues to stabilize against the British pound right at the 200-day EMA. This probably shouldn’t be much of a surprise because we have seen pretty relentless selling. I think a bounce at this point is likely, but that bounce is something I’d be interested in shorting.

The European Central Bank is expected to stay put where it is, but inflation is a bit sticky in the United Kingdom. I do think at this point in time, there is about an 80% chance that we have peaked. I’d be particularly interested in the top of the candlestick from the Monday session near 0.8715. If we break down below the 200-day EMA, the next target would be 0.86.

For a look at all of today’s economic events, check out our economic calendar.