Event to pay attention to today:
15:30 EET. USD – Unemployment Rate
EURUSD:
EUR/USD drifted further into bearish territory on Thursday, pulling back a small but steady sixth of a percent and pinning the bid to 1.0300 as the pair hovered near 26-month lows.
European retail sales data in November fell short of expectations, dampening the euro’s potential bullish momentum ahead of the release of US Non-Farm Payrolls (NFP) on Friday. EU retail sales fell to an annualised 1.2% y/y in December, well below November’s revised 2.1%.
US markets were closed on Thursday for a day of mourning for the death of former President Jimmy Carter, who passed away in December at the age of 100. Market participants got a respite from this week’s hectic US data release schedule, but there is another round of Friday’s NFP employment data ahead, which will further constrain an already tight market. US job growth is expected to fall slightly in December, while wage growth is expected to remain flat or even decline on a month-on-month basis. Lower wage and job growth could wreak further havoc on the broad market’s hopes for a rate cut before 2025, as strong wages keep inflation expectations high. Nevertheless, strong employment numbers mean that the Federal Reserve (Fed) will have little reason to change rates.
Trade recommendation: Watch the level of 1.0280, when fixing below consider Sell positions, when rebounding consider Buy positions.
Origin: FreshForex
