With ADP employment change doubling and jobless claims falling, we could expect a healthy NFP data though the gains should be modest. Short EUR/USD?
- Most signs point towards a healthier NFP tonight as ADP employment change doubled while jobless claims continue to fall.
- The only concern is that the labour component of Non-Manufacturing ISM fell to a 4-month low in January.
- The recent rally in dollar despite the coronavirus outbreak could mean that market sentiment could take precedence instead of data.
- We believe that dollar’s rally could continue as long as the US stock market continues to move higher.
- Thus, we are bullish on dollar movement and even a slightly weaker NFP could provide a better short entry opportunity for EUR/USD.
- However, we do not expect huge movement even if NFP surpasses market expectations by a huge mile.
- EUR/USD recently broke a critical support at the 1.0990 price level and could head lower towards its next support at 1.0940.
Fullerton Markets Research Team
Your Committed Trading Partner