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EUR/USD – Disappointment on the non farm payroll release – Analysis for January 8th 2018

Friday’s release of non farm payrolls disappointed the dollar bulls and the EUR/USD pair initially tried to rally above the current resistance at 1.205. Market sentiment towards the greenback improved after Fed members comments about this years’ rate hikes. Support is set at 1.195, resistance at 1.205.

Commentary:

The dollar initially fell on Friday after the release of the non farm payrolls. Economists expected employment to increase by 190,000, but the data showed an increase of only 148 thousand. It was quite a disappointment after the rise in November was 252 thousand.

The greenback managed to rebound after new comments about the future path of the Fed’s monetary policy. First, Loretta Mester from Cleveland Fed in an interview said she’s expecting roughly four rate hikes this year as the economic growth improves and unemployment remains subdued. Friday’s data showed the unemployment rate stayed unchanged at 4.1%.

San Francisco Fed President John William said in an interview on Saturday that the Fed should raise the rates three times as the already strong U.S. economy will get a boost from the tax code overhaul signed by Donald Trump at the end of the last year.

Today’s news:

  • 11:00 Euro zone – Retail sales
  • 21:00 USA – Consumer credits

Technical analysis:

eurusd1221

Pic.1. EUR/USD chart.

The EUR/USD is trading slightly below the 1.20 level at the time of writing. Todays economic calendar is almost empty, so we expect the pair to consolidate in the current range. Euro could pick up if the retail sales data come above the expected 2.4% reading.

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