Yesterday, the US data came out mixed. The private sector added 184,000 jobs, while the S&P Global Services PMI decreased from 52.3 in February to 51.7 in March. The market didn’t react to these reports. Fifteen minutes later, the ISM Services PMI was released, which fell from 52.6 to 51.4. At this point, the euro surged by 45 pips, closing the day up by 67 pips. This appears like speculation. The S&P 500 rose by 0.11%, while the Dow Jones fell by 0.11%. Bond yields changed slightly.
Such speculative actions confuse market expectations regarding tomorrow’s key employment data. The forecast for Nonfarm Payrolls is 205,000, compared to 275,000 in February. If we assume that the data will come out in line with the forecast, the euro may show a strong movement in either direction, but with different interpretations: an increase could be explained by an imminent rate cut, while a decrease could be seen as a flight from risk.
This situation still works within the framework of the euro showing a corrective move towards the target range of 1.0895-1.0905. If the price consolidates above this range, it may move towards 1.1001/10. The Marlin oscillator is in negative territory – it needs to enter the bullish territory before the price reaches the MACD line; otherwise, the growth will cease without any support.
On the 4-hour chart, the price is rising above both indicator lines, and the Marlin oscillator is slightly turning downwards to discharge before it shows growth. On the other hand, this could be a sign of the end of the bullish correction. In addition, take note that yesterday, the euro showed growth as trading volumes were lower, but slightly larger compared to Monday or Tuesday.
If aggressive players want to trigger the bears’ stop-loss orders, they need to push the price significantly higher, possibly right into the range of 1.0895-1.0905, and then the momentum could carry the price to the 1.1010 area. By then the sellers might organize a powerful attack. We await further developments on Friday.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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