Although stocks have reversed course in the opening hour of European cash trading, major currencies continue to sit tight in a pre-NFP lull for the most part so far today.
EUR/USD is looking tepid, ranging between 1.1834 and 1.1858 as traders appear disinterested to make a move until after we get past the US jobs report later.
For now, sellers still hold near-term control as price action rests below both the key hourly moving averages. The 200-hour MA (blue line) @ 1.1866 will offer the first line of defense for sellers before the 100-hour MA (red line) @ 1.1891 comes into play.
Those will be the near-term upside levels to watch in case the dollar turns tail ahead of the long weekend in the US later in the day.
As for downside levels, the recent trendline support that has been keeping the pair afloat was briefly broken in the intraday chart (as seen above) yesterday but is still somewhat intact I would argue, so that alongside 1.1800-10 will be the key near-term support levels to eye if the dollar pushes higher towards the end of the week.
Further support is then seen closer to 1.1780 before we revisit the recent daily lows around 1.1754-63. Beyond that, the 1.1700-10 region remains a key line in the sand in terms of limiting downside moves since August trading.
Looking ahead to the US jobs report later, I'm not too sure how much of a game changer it will be. The Fed has put more emphasis on labour market conditions for their new strategy, but what is on offer in the month of August shouldn't be anything new.
There may be spots where the recovery in the labour market is weakening, and there are downside risks to the numbers to consider. The devil will be in the details.
That said, I would argue that the market will react more to the numbers - if there even is a significant reaction - rather than the details.
And in any case, the stock market reaction may perhaps end up being the key driver in US trading later so be mindful of that when viewing the dollar and risk trades as well.