Wednesday the ADP came lower than expected. Only 119 thousand jobs were added in the private sector, excluding agriculture, while the expectations were of 154 thousand. The EURUSD touched a high at 1.3241 but retraced and closed at 1.3178 forming a Shooting Star at the 50% retrace of the full downtrend.
On Thursday the ECB cut its interest rate at 0.5% from 0.75%. This move was expected by the market and also estimated by us. The weak Euro Area economic data, especially German economic data were signaling a possible cut, and it came. The Euro drop vs. the US dollar back to 1.3036 where it touched a low, but closed the day at 1.3062.
Today there is another important release. The Non-Farm Payrolls is expected to rise at 146 thousand, a higher number that the previous month. Looking at the other employment indicators like Unemployment Claims, which was at about the same number as last month, and the ADP which came also under expectations, we might expect a lower NFP than the forecast.
If today Non-Farm will disappoint, than we might see a rally in the EURUSD based also on speculation that the FED will continue the QE.
From the technical point of view, EURUSD finds itself in a Rising Wedge pattern. If it will fall under 1.3036 than we might see a retest of 1.2957 and why not, even lower at 1.2870. On the other hand if Euro will gain than this Wedge might be invalidated and with a higher high over 1.3241 the up trend will continue to be in place. Next resistances are found at 1.33 and 1.3350.