FXstreet.com (Barcelona) - The Euro has continued with its decline against the Dollar during the European morning from 1.4335 to reach intra-day low at 1.4275 ahead the Nonfarm payrolls data. Currently the EUR/USD is trading around 1.4280/90, 0.15% below today's opening price action at 1.4305.
Nonfarm payrolls are expected to decline 2k in December related to the level in November, it could be the lowest level since January 2008. Expectations could be beat as informs as ADP job report has posted the small decline since March 2008, 4-week initial claims average has continued falling this week and the manufacturing ISM employment component has risen to 52.00. Unemployment rate is expected to remain unchanged at 10.0% during December.
According to TJ Marta, chief analyst at Marta on the Markets, the EUR/USD is trading in slight uptrend channel: EUR/USD (1.4305) is down overnight at the bottom of what appears to be a slight uptrending channel formed since EUR/USD bottomed in mid-Dec. The daily slow stochastics are trending higher in oversold territory, suggesting the potential for upside pressure. Technical resistance lies at 1.4484 (Jan5 high) and 1.45 (psychological). Support for EUR/USD lies at 1.4218 (Dec22 low), 1.4069 (38.2% Fibonacci retracement of Oct'08 to Nov rally), 1.4046 (Aug17 low), and 1.4000 (psychological). EUR/USD's short-term correlations with other assets have all fallen in recent sessions, although the S&P500 remains significant, The decline in cross asset correlation stems from credit concerns weighing on the currency.
Valeria Bednarik, FXstreet.com collaborator, comments: NFP are expected around -3K from -11K in November, yet there is lots of speculation of a positive reading for the first time since 2007. Meaning market has too high expectations: a bad reading could tear apart dollar. An important thing to consider is the unemployment rate: is expected around 10.1% from 10.0% in November and 10.2% past October. Pay attention to any number above 10.3% or under 9.9% as if unemployment rate changes that much could lead the way; past month revisions could also me meaningful.