EURUSD: US$ choppy after NFP. Euro eyeing Greek talks

The dollar remained choppy either side of 1.1200 following Friday’s US Jobs data, where the overall headline rate dropped to 5.4%, hitting the lowest level since May 2008, while the NFP was close to expectations at 223K. Less encouraging was the previous months NFP figure, which was revised down from 126K to 85K, while the average hourly earnings was also lower than expectations which rose 0.1% mm (exp 0.2%).The coming week will be busy, beginning today when the Euro group will discuss the situation in Greece and then on Wednesday when the EU GDP figures will be released. After managing a Eur 200 mio repayment last week, Greece is due to make another payment – this time of Eur750 mio –  to the IMF tomorrow, so the market will be focusing closely on  whether that takes place or not. A failure here would potentially send the Euro sharply lower.

Technically, after having traded a 1.1178/1.1289 range on Friday, the Euro closed for the weekend back below the 100 DMA (1.1245) but otherwise with little change in the points to watch. While the dailies are showing early signs of rolling over following the recent rally, the weekly charts still point higher, so I suspect that we can expect further choppy trade in the days ahead.

To the downside, mildly favoured early in the week according to the 4 hour charts, below Friday’s 1.1178 low  (200 HMA) would potentially see a swift drop to 1.1120  (daily Tenkan) and then, below 1.1100, to 1.1065 (5 May low/ daily cloud top) . Under this would then head back towards the Fibo support at 1.1035 (38.2% of 1.0461/1.1391).

The topside will see sellers at 1.1250 and then at Friday’s 1.1289 peak ahead of 1.1300. Above this would see another run towards last week’s 1.1391 high although this looks unlikely in the short term. If wrong then further gains would take the Euro on to 1.1400 and 1.1449 (19 Feb high) and then further out at 1.1533 (3 Feb high) and to the major descending trend resistance, currently at 1.1600.

I prefer to start the week trading mildly from the short side, and today would look for 1.1240/1.1165 to cover it, with a bias of selling into strength. Further out more choppy trade below last week’s high looks likely.

Economic data highlights will include:

M: Eurogroup Meeting, US Labor Market Conditions

T: US Monthly Budget Statement

W: Provisional German/France/Spain/Italy/Dutch GDP (Q1), Provisional EU GDP, US Retail Sales, Business Inventories

T: Ascension Day Holiday (EU), US Jobless Claims, PPI

F: EU Trade Balance, New York State Empire Mfg Index, US Capacity Utilisation, Industrial Production, Rts/Michigan Consumer Sentiment Index.

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