As I indicated in yesterday’s wrap-up, I’m not entirely sure whether the market would greet an upbeat US employment report by adding to the reflation trade (and selling the dollar) or take the data at face value and buying it. Best be prepared for any scenario by looking at important points both above and below the market.
1.4230/40 is important resistance in the near-term. Prices stalled at 1.4240 in London Thursday morning and at 1.4230 today. Above that, 1.4335/40 is the focus. The BIS was seen selling on the two occasions when we visited that level earlier this week. 1.4350 barriers are expected.
On the downside, 1.4085, an hourly uptrend from the 1.3425 area is first support at 1.4085. 1.4070, yesterday’s spike low is also eyed; 1.4050 is further support. Central bank bids have been scattered below the market all week.
