US NFPs and Ongoing Eurozone Developments to Dictate Trade

[akats]

Euro gains have stalled out, and in the end, it has been a week of consolidation in the markets. EUR/USD remains the key market to watch for broader directional insight, and the critical short-term levels to watch above and below come in by 1.3235 and 1.3025 respectively. A break and close above 1.3235 will open the door for the next upside extension towards the 100-Day SMA by 1.3350, while a close back under 1.3025 could suggest that a fresh medium-term lower top is in place in favor of bearish resumption.

Relative performance versus the USD Friday (as of 11:25GMT)

 

EUR +0.25%

CHF +0.24%

GBP +0.20%

CAD -0.01%

JPY -0.02%

AUD -0.13%

NZD -0.25%

 

 

Fundamentally, there are any number of catalysts on the horizon which could spark the next round of volatility. The ongoing Greek PSI talks are most probably at the forefront of investor minds and any clear resolution here will likely inspire a fresh round of Euro bids through the 1.3235 resistance. Conversely, a breakdown in talks which leads to the default of Greece, will likely open a bout of risk liquidation which will weigh on the Euro back below 1.3025. Another event on traders’ minds is today’s US NFP report. Overall, we have been seeing a steady recovery in US economic data, and a number which deviates far from expectation on either side, could very well open a wave of volatility which results in a break of the mentioned levels in the Euro.