Week Ahead: Non-Farm Payrolls Forecast 230k


Source: Growth Aces Forex Trading Strategies

EUR/USD
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[li] We maintain our opinion the EUR/USD have bottomed out and do not expect the USD to regain its strength. In our opinion only very strong U.S. economic data would have potential to get EUR/USD back on a bearish trend observed since the middle of last year.
[/li][li] One of the most important events this week will be the Eurozone March CPI estimate (on Tuesday). We expect HICP flash to be 0.0% yoy vs. the market forecast of -0.2% yoy. Higher inflation reading should give a boost to the EUR.
[/li][li] Investors will focus their attention also on U.S. manufacturing PMI for March (on Wednesday). The market expects weaker reading than in the previous month. In our opinion even slightly higher data will be not sufficient to trigger any significant downside move on the EUR/USD.
[/li][li] But the most important event this week will be the release of U.S. non-farm payroll data (on Friday). Our forecast of 230k is lower than the market consensus of 244k and lower than strong 295k reading from the previous month. That is why long positions on the EUR/USD are justified.
[/li][li] Friday will be a holiday on many markets.
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GBP
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[li] GBP traders will focus on UK GDP growth revision for the fourth quarter (on Tuesday) and manufacturing PMI (on Wednesday). Slightly upward GDP revision will be probably not enough to spur demand for the GBP.
[/li][li] We expect GBP to depreciate against the EUR. However, the GBP may strengthen somewhat against the USD. The bullish potential on the GBP/USD will be, however, limited given the uncertainty ahead of the UK general election in early May.
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JPY
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[li] The JPY has benefited from Yemen conflict, as geopolitical tensions always support safe-haven currencies. A further intensification of tensions should be JPY-positive.
[/li][li] Let us take a look at the economic calendar for this week. First-quarter Tankan results (on Wednesday) are expected to be slightly better than in the previous quarter which should be helpful to JPY bulls. Nevertheless, the performance of Japanese economy is still poor and we can still see speculation about additional QE measures. In our opinion the probability of such a scenario is very low.
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Source: Growth Aces Forex Trading Strategies