EUR/USD Forecast: Daily Technical Outlook April 7, 2017
The markets have been shaken today morning by news of attacks by the US on a Syrian airbase using cruise missiles in retaliation for the chemical attacks by the forces of Assad a few days earlier. This has ratcheted up the risk quotient by several times this morning but so far, the reaction from EURUSD has been muted. It still continues to trade within its weekly range though it sits near the lows of its range as the flight to safety helped to keep the bid under the dollar.
Euro Under Pressure
The yen and gold have gained a lot due to this flight to safety and we expect the stock markets to get hit when they open up for the day in the European and US sessions. For the whole of yesterday, there was not much happening in the markets and the EURUSD was trading within a tight range as it was consolidating and trading in a wait and watch mode ahead of the NFP today. The strong ADP employment report on Wednesday has increased the expectations for the strong NFP.
The market expects the NFP to come out strongly, in lines with the ADP report on Wednesday, and with this piece of news already priced in, it would be interesting to see what happens to the EURUSD if the report is either as per expectations or even below expectations. We believe that in either case, the dollar would weaken or trade steadily which would mean that the impact on the pair to the downside would be limited unless the report comes in very strong.
Looking ahead to the rest of the day, we have the NFP report from the US which is likely to dominate the trading during later in the day and though we do not have any economic news from the Eurozone for today, we expect the impact of the US attack on Syria to continue to exist in the markets for the rest of the day which is likely to keep the EURUSD pair under pressure and the markets in a risk off mode.