Daily U.S. Session Watchlist: EUR/USD

 I’m seeing a short-term consolidation pattern on EUR/USD, and the upcoming reports from the U.S. could spur a breakout.

Which way do you think this pair might go?

Before moving on, ICYMI, today’s Asia-London session watchlist looked at the trend line breakdown and pullback on EUR/AUD. Be sure to check that out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

  • New Zealand quarterly employment change up 1.0% vs. 0.7% forecast in Q2
  • New Zealand jobless rate down from 4.6% to 4.0% vs. 4.4% forecast
  • New Zealand labor cost index up from 0.4% to 0.9% vs. 0.7% estimate
  • ANZ, Westpac, KiwiBank, ASB, BNZ project an RBNZ rate hike later this month
  • Australian retail sales fell by 1.8% as expected in June
  • Chinese Caixin services PMI up from 50.3 to 54.9 vs. 50.6 forecast

Upcoming Potential Catalysts on the Economic Calendar:

  • U.S. ADP non-farm employment change at 12:15 pm GMT
  • U.S. ISM services PMI at 2:00 pm GMT
  • FOMC member Clarida’s speech at 2:00 pm GMT
  • U.S. EIA crude oil inventories at 2:30 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: EUR/USD

This pair has formed lower highs and found support at the 1.1850 minor psychological handle, creating a descending triangle on the 1-hour chart.

Will EUR/USD break out soon?

Leading jobs indicators from the U.S. later today could be strong catalysts for a big move, as traders are keen to find out how Friday’s NFP might turn out.

Don’t forget that the Fed is still holding out for more signs of a jobs recovery before deciding to reduce stimulus. This means that an upside surprise could revive taper talks while weak results could dash any tightening hopes.

All eyes will be on the ADP report, which might print a slightly stronger pace of hiring at 695K versus the earlier 692K. A few hours later, the ISM services PMI could be on the radar, with the reading slated to climb from 60.1 to 60.5.

A break below the short-term triangle support could send EUR/USD lower by the same height as the chart pattern, which spans roughly 50 pips.

Technical indicators, however, are hinting that support is more likely to hold than to break. The 100 SMA is above the 200 SMA while Stochastic is starting to pull up from the oversold region.

Better keep your eyes peeled for a potential upside breakout, too!

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