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Thomson Reuters
Nov 02 - 12:12 PM
EUR/USD - US Jobs Report Tempers EUR/USD Rally Prospects
First appeared on eFXplus on Nov 02 - 10:00 AM

Today's surprisingly strong U.S.
jobs report fired a shot across the bow of those betting on a EUR/USD rally. Expectations of further EUR/USD gains had been soaring ahead of the report after the rapid ascent recently from the 1.1300 area.
A break of the 21-DMA seemed likely with tests of 1.1550 and 1.1650 resistance anticipated afterward. Instead, EUR/USD dropped toward the 10-DMA after the data as two-year German-U.S.
spreads widened and fed funds futures prices slipped, both of which buoyed the dollar.
Much lower than forecast Italian October PMI could be adding weight to EUR/USD. A shrinking Italian economy suggests protracted budget tensions between Rome and Brussels over Italy's elevated spending projections.
Daily techs now warn of potential EUR/USD losses.
The recent gains stalled just short of the 21-DMA, and the ensuing slide is forming a gravestone doji on the charts. That indicates a pullback is due, though EUR/USD bulls have some reason to hope.
Although the jobs data was solid, fed funds futures prices have only slipped marginally, suggesting traders still do not buy into the Fed's projected path of rate rises.

chart: Click here

Thomson Reuters IFR Markets


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