Forex News: The ECB Interest Rate remained unchanged as expected but Mario Draghi’s comments about “unconventional” measures against deflation were perceived as bearish for the Euro and took the pair into major support.
Yesterday’s move puts the bears back in control of the pair, but an important barrier sits in front of falling prices: the support level located at 1.3710. If this support will be broken today, the next medium term target is 1.3550 but for the moment the Relative Strength Index is approaching oversold territory and support is still intact so retracements higher are possible. Today is an important day as US employment data is released and will probably overshadow the technical aspect.
The release of the US Non Farm Employment report is scheduled at 12:30 pm GMT and the expected figure is 199k, an increase from the previous 175K. Rising levels of employment are crucial for the American economy and suggest that consumer spending is likely to increase in the near future, a fact considered bullish by market participants. Almost always this indicator is a huge market mover and has a major impact on price action so we recommend caution if trading at the time.
Throughout yesterday’s trading session the pair had a bearish behavior, moving south of 1.6600 support on the back of a worse than anticipated value of the British Services PMI.
The current momentum is bearish and price broke 1.6600 to the down side once again. Under normal circumstances, this move could be easily continued during today’s trading session but the release of the US employment report will be the main event of the day and will probably dictate direction. The most important levels to watch are 1.6600 as resistance and 1.6480 as support.
We have a slow day ahead in terms of British economic data and all focus will be on the US Non Farm Employment Change which has the potential to strengthen or weaken the greenback considerably, thus affecting the pair directly.