EUR/USD Waiting to be Obliterated by Positive NFP

October 7, 2016

It’s a good day to be a Forex trader. NFP Friday in the lead up to an anticipated Fed interest rate hike.

Honestly, it doesn’t get much better than this in terms of potential for trading opportunity on the back of markets re-pricing when reality doesn’t meet expectations.

With WBP Online dropping off the face of the Earth, we’ve changed up our forex economic calendar to use the Myfxbook feed. We’ll be including some of the most popular widgets on the calendar page shortly to make it a go-to place for news and sentiment trading. Keep an eye on this space!

But all that matters tonight is NFP:

USD Average Hourly Earnings m/m: 0.2% expected and 0.1% previously.
USD Non-Farm Employment Change: 171K expected and 151K previously.
USD Unemployment Rate: 4.9% expected and 4.9% previously.

If you look at the economic data for the past month, pretty much across the board it’s better. On our new calendar page, scroll back and click each release for a detailed historical chart comparing expecations with the actual release.

This is why the US Dollar ralying off support in anticipation of further good news is no surprise:

USDX Daily:
161007_usdx_daily
Click on chart to see a larger view.

Looking for a chart we can look to trade this USD sentiment off of, brings us to EUR/USD.

On a parralel storyline, we have been speaking about the fact that Deutche Bank is in trouble. But as you can see in the charts from that post, the Euro wasn’t reacting off the move.

Furthermore to this narrative, we overnight got International Monetary Fund managing director Christine Lagarde telling Bloomberg TV that the sooner Deutsche Bank reaches a settlement with the US Department of Justice, the better it will be for all involved.

“A bad settlement is always better than a good trial.”

EUR/USD Daily:
161007_eurusd_daily
Click on chart to see a larger view.

So now a week later, EUR/USD has started to move. Euro weakness on the back of banking system uncertainty combined with US Dollar strength thanks to huge market anticipation on data and the Fed.

The potential for this support level to be absolutely obliterated heading into tonight if the number beats expectation is real!

Are you anticipating a EUR/USD breakout to the downside? Let us know on the @VantageFX Twitter account.

———

On the Calendar Friday:
CNY Bank Holiday

GBP Manufacturing Production m/m

CAD Employment Change
CAD Unemployment Rate
USD Average Hourly Earnings m/m
USD Non-Farm Employment Change
USD Unemployment Rate

Fund Your Account Today and Win an Apple iPhone 7 or iWatch Series 2!

Open or fund your Vantage FX account today and win an Apple iPhone 7 or iWatch Series 2!

Dane Williams – @VantageFX

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Forex broker Vantage FX Pty Ltd does not contain a record of our prices or solicitation to trade. All opinions, forex news, research, tools, prices or other information is provided as general market commentary and marketing communication – not as investment advice. Consequently, any person acting on it does so entirely at their own risk. The expert writers express their personal opinions and will not assume any responsibility whatsoever for the Forex account of the reader. We always aim for maximum accuracy and timeliness, and FX broker Vantage FX shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.

Social

Free Daily Market Update

Live Spreads

SymbolBidAskSpread

Spread

Sign up to the latest forex news and daily FX trading setups

Get started with a FREE $50,000 demo account