What will NFP bring us?

The forecast is -8ok, last month we had -80k and some financial traders are expecting -100k. Previous month was -63k and prior to that we had -17k. Doesnt look too healthy does it?

Irrespective of what the figure is for this month, it is crystal clear the US is not running on all cylinders. We think the US is in the embryonic stage of a recession. Oil prices are up, Gold is up (recent fall from the figure could be a breather), housing market is not doing too well currently.

So, from the above we should see the USD gain momentum to the downside right? Not necessarily, the USD has spent a lot of it's time in negative territory. We recently hit a 1 month low on the Euro Dollar pair and the sell off could continue towards 1.5350 region. Deal below that and 1.5000 will be the next support zone.

The 4 hour chart below shows a squeeze in progress on the Euro Dollar.



Chart courtesy of Advanced GET. Data provided by eSignal.

Good trading.

Forex Analysts
Javid Shaik & Anne Chapman