FOREX NEWS: NON-FARM PAYROLLS – THE CATALYST FOR STRONG BREAKOUTS
EUR/USD
Forex News: The pair just completed another lacklustre day, without any major releases and with price trapped between support and resistance, bouncing almost perfectly between them.
Technical Outlook
Once the pair entered the channel between 1.0680 resistance and 10630 support, it marked the beginning of a ranging period that will be over only after a strong break of either one of the barriers. The 50 period Exponential Moving Average is still above price and angled downwards, so the overall bias is still bearish but considering the sideways movement seen over the last couple of days, our short term bias is neutral. It must be noted that after periods of inactivity and ranging movement, the pair tends to move strongly in one direction.
Fundamental Outlook
The U.S. Non-Farm Payrolls are today’s highlight and also an indicator that will probably take the pair out of the range seen this week. The report is released at 12:30 pm GMT and shows changes in the total number of employed people, apart from the farming industry; it is widely considered the most important U.S. jobs data and usually strengthens the US Dollar if it shows a reading above expectations. Today’s forecast is a change of 174K, lower than the previous 235K.
GBP/USD
Yesterday for the entire trading session the pair remained close to the 50 period Exponential Moving Average, which is now almost flat, indicating a lack of determination from either side.
Technical Outlook
On the chart above we can see the pair is trapped inside a triangle pattern, which will probably decide the next direction and until price moves out of it, we can expect so see more of the same choppy movement. The resistance zone located at 1.2480 – 1.2500 is also a strong barrier, while support is located at 1.2420 and for a true breakout we need to see these levels broken decisively. Important data comes out today so the pair is likely to show a strong breakout.
Fundamental Outlook
At 8:30 am GMT the British Manufacturing Production is released, showing changes in the total value of goods produced by the manufacturing sector. A higher change than the forecast 0.3% indicates increased economic activity and usually strengthens the Pound. Of course, the pair will be directly affected by the U.S. employment data.