Friday’s release of the U.S Non Farm Payrolls triggered mixed market reaction and difficult to trade movement. The actual value was 192K, lower than the anticipated 199K, but not weak enough to drive price significantly higher.
The pair struggled to break 1.3700 and close below it but failed and at the moment there are signs of rejection: the four hour candles show long wicks in their lower part and the Stochastic is appearing to cross upwards, in oversold territory. However, short term momentum belongs to the bears so if price closes below 1.3700, we might see a touch of 1.3650 which is the next support. To the north, the first level of interest is 1.3770.
We have a pretty slow day ahead, with the only notable indicator being the German Industrial Production which is released at 6:00 am GMT. This is a leading indicator of economic health which measures the output produced by the industrial sector and has the ability to strengthen the Euro if higher values than the estimated 0.3% are posted.
The Pound continued to lose ground against the U.S. Dollar during Friday’s trading session but the distance traveled wasn’t significant and the release of U.S. employment data generated a lot of back and forth movement, which made trading difficult on the lower timeframes.
Although the NFP was disappointing for the greenback, the pair is still moving lower, below 1.6600. This keeps the momentum in favor of the bears and makes 1.6480 the next potential target but the Stochastic is close to the 30 level which indicates an oversold condition, a fact that increases the possibility of bullish moves. However, the lack of economic releases may translate into slow movement.
The United Kingdom doesn’t release any major economic or financial data today so the pair’s direction will be decided by the technical aspect of the market.