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- The US dollar recovers modestly in US hours, remains weak compared to the expectations of monetary policy.
- After a "dovish" ECB, attention is focused on the US official report on employment.
The EUR / USD pair was unable to maintain above 1.1300 and retreated. Towards the end of the session, it trades at 1.1270 / 75, up 35 pips for the day. The euro has kept some of the gains that followed the ECB meeting.
As expected, the central bank kept its rates unchanged. "The ECB has strengthened its dovish tone by making more accommodating decisions than expected. Forecasts have been delayed for six months, from the end of 2019 to the middle of 2020. Although this deadline is expected, the decision was not expected for today, "wrote BBVA analysts. Draghi said the central bank could cut rates or even boost the buying program if prospects deteriorate. BBVA analysts added that the euro had appreciated "This suggests that markets are much less clear than the ECB – markets implied that the likelihood of a reduction in consumption by April 2020 was 66% before the ECB meeting .
On Friday, the main economic report will be the US official report on employment. The non-farm payroll is expected to increase by $ 185,000. The data could become more relevant for operators given the rising expectations of a possible rate cut by the Federal Reserve. "A failure for NFP would have little benefit for the US dollar. The narrative is based on the Fed's rate-cutting outlook, but also on the fact that the US economy looks much less exceptional this year than last year. Weak US data should benefit market sentiment, especially if combined with weak US dollar and stronger global equities", Explained TDS analysts.
Failure greater than 1.1300, supported over 1.1200
In advance of critical employment data, the greenback seems weak overall, but it has managed to keep key technical levels ahead of the majors. In the case of the EUR / USD, the pair has traded above 1.1300 today but has failed to hold back and retreat. The tone is still bullish in the short term, but a consolidation from the top seems necessary to clear the way of an additional gain. On the other hand, key support could be seen around 1.1190 / 1.1200, a horizontal range that contains the 20-day moving average.
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