EUR/USD to test key support at 1.1750 on strong NFP report – TDS

In the view of economists at TD Securities, with Powell and company pointing to the next few employment reports as key to solidifying a decision on taper timing, more deference is likely to be paid to the data.

See – NFP Preview: Forecasts from seven major banks for July jobs report, estimates vary more than usual

Strong NFP figures to send the dollar higher

“Given that Powell has noted that the FOMC will need the ‘coming meetings’ to discuss taper, we're inclined to think that the tighter positive correlation with data surprises will persist for some time, at least into the early fall period. With this in mind, a surprise in either direction of payrolls should drive the USD respectively.”

“While we are cautious in extrapolating moves post-payrolls at a time when seasonal limitations are in place (liquidity and volumes), our forecast for an above-consensus print has us biased for moderate dollar strength.”

“EUR/USD is a solid candidate to test key support at 1.1750 in the near-term, mainly if payrolls come in much stronger than our forecast.” 

“A disappointment should see 1.1880/95 tested.”