FX News - Apr 4 2014: Market Braces for US NFP

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The euro fell on Thursday when European Central Bank (ECB) President Mario Draghi said that they are willing to use unconventional means in order to help raise the region’s inflation rate. In addition, Mr Draghi said that he and other members of the bank discussed the possibility of a negative deposit rate. “Negative deposit rate received a good deal of attention at today’s discussion.”

With what were seen as dovish comments, the euro fell particularly against the greenback in yesterday’s European session. However, the volatility in the pair isn’t over yet as the market awaits the biggest event today or even the entire week, that is, the US Nonfarm Payrolls data (2:00PM GMT).

Around the time of Mr Draghi’s statement, the EUR/USD managed to peak at the 1.3800 area. However, it eventually slid after that, bottoming out at under the 1.3700 zone. It opened today’s Asian session at 1.3723, but it continues to struggle, and shows no signs of recovery at the moment. It is currently trading at 1.3710, with initial resistance seen at 1.3763, followed by 1.3798. Meanwhile, initial support is at 1.3654, followed by 1.3620.

Then there’s the USD/JPY pair, which has so far remained within a very tight range ahead of the US NFP event. After opening the Asian session at 103.89, the pair traded within the 103.85 and 103.95 areas. As with the EUR/USD, volatility in the pair may be expected later today. It is currently trading at 103.92, with initial resistance seen at 104.19, followed by 104.46. Meanwhile, initial support is at 103.86, followed by 103.60.

As for the AUD/USD, the pair pretty much erased yesterday’s losses due to mixed economic data from Australia and China. It opened the Asian session at 0.9232, but has so far remained flat after that. It is currently trading at 0.9235, with initial resistance seen at 0.9244, followed by 0.9267. Meanwhile, initial support is at 0.9193, followed by 0.9170.

By FX Strategy Team, Published on 4th of April 2014
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