This Weeks Data Might Give Dollar A Boost

Another week has ended with more life time high’s reached all across the board. The EUR/USD finally broke 1.3666 and staged a rally towards 1.3690 and the EUR/JPY also managed to break the important level of 163, when the pair climbed its way to a new life time high of 163.30.

Although the week was not busy data wise, due to the markets important psychological levels there was a lot of trading action driven mainly by negative US data. With the new week started and a busier economic calendar coming out of the US, it will be very important to see how and if the euro will perform on those high levels near 1.37.

So far the dollar has started on a positive note, with the EUR/USD not being able to sustain its gains at 1.3680. With better than expected ISM Manufacturing data and Prices Paid coming out of US yesterday, we saw a boost in all dollar related pairs with EUR/USD breaking 1.36 and trying to break the support level of 1.3585 and USD/CHF finally coming out of its recent 1.20-1.21 range and posting new weekly highs at 1.2180.

Although the greenback is not in the clear yet, this weeks payroll data is the one thing on traders minds, which may help the dollar bulls make a relief rally that has been needed for some time. It will be interesting to see the ISM Non Manufacturing data come out tomorrow in order to see if all the talk of the economic slow down is actually becoming fact.

Furthermore, the EUR/USD is still at very high levels and we see that the market is trying its best to push the pair up on every chance it gets with main target to break the 1.37 level and move further up. We believe that at those levels it will be difficult to accomplish that so easily, however given the fact that US keeps the negative economic data coming, the 1,37 may come sooner rather than later.

As the main event is Non Farm Payrolls all eyes will be there on Friday analyzing every aspect of the news while analysts already speculate a lower figure. Even though this number is difficult to predict, we might have some clue today from the ADP report.

So, as the week progresses and more volatility appears, we should be looking for more trading chances and maybe for a dollar rally at the end of the week, providing that data is not all doom and gloom, and maybe there is a small hope that the US economy is not as bleak as everyone seems to make out.