EUR/USD: Correction To 1.2330 Likely Ahead Of NFP

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On Thursday the 8th of March, trading on the EUR/USD pair closed down. I don’t make predictions on payrolls day or on days when Mario Draghi has a press conference, as volatility surges and TA doesn’t work.

The ECB maintained their key rate at its current level. The margin rate was kept at 0.25%, while the deposit rate was also left unchanged at -0.4%.

ECB president Mario Draghi announced that the regulator has upgraded its GDP growth forecast for 2018 from 2.3% to 2.4%. The forecast for 2019 remained at 1.9%. The inflation forecast for 2018 also remains unchanged at 1.4%, while for 2019; the forecast has been revised downwards from 1.5% to 1.4%. Draghi also said that Eurozone growth risks were balanced. He made no mention of increasing the bond purchasing program.

The euro reacted with a jump to 1.2446, before dropping to 1.2295 in today’s Asian session. This type of trader activity is easily explained by the upcoming NFP report. Traders have closed their long positions on the euro to avoid any risks.

Day’s news (GMT+3):

10:00 Germany: industrial production (Jan), trade balance (Jan).

10:45 France: industrial output (Jan).

12:30 UK: industrial production (Jan), manufacturing production (Jan), total trade balance (Jan), consumer inflation expectations.

16:00 UK: NIESR GDP estimate (Feb).

16:30 Canada: unemployment rate (Feb), net change in employment (Feb), capacity utilisation (Q4).

16:30 USA: unemployment rate (Feb), Nonfarm payrolls (Feb), average hourly earnings (Feb), average weekly hours (Feb), labour force participation rate (Feb).

18:00 USA: wholesale inventories (Jan).

21:00 USA: Baker Hughes US oil rig count.

Fig 1. EURUSD hourly chart. Source: TradingView.

I’ve imposed some new Gann lines on the chart. The drop from 1.2446 amounted to 112 degrees. We’ve got a double top on the hourly timeframe, but believe me when I say this doesn’t mean anything. If the NFP report is weak, the euro will easily recover yesterday’s losses in the space of 30 minutes.