FXStreet (Guatemala) - Valeria Bednarik, chief analyst at FXStreet explained that investors continued trading on sentiment this Thursday, and stocks led the way for FX traders.
Key Quotes:
"At the beginning of the day, Chinese manufacturing data for September were largely steady from the previous month, as the government's official gauge of manufacturing activity improved to 49.8 from August 47.9, while the Markit PMI fell to a fresh over six years low of 47.2 from a previous 47.3, although above previous estimate of 47. Asian share markets closed in the green, sending the EUR/USD pair down to 1.1134. In Europe, the release of the local PMIs showed also a soft picture, with the German manufacturing PMI for September falling down to 52.3 from previous 52.5, while the French reading held above the 50.0 level. The region final reading came as expected at 52. European stocks halted their initial rally after the news, favoring a recovery in the common currency, and extended their declines after Wall Street opening, as US data released through the session was quite poor, with the weekly unemployment claims rising to 277K and the ISM manufacturing PMI falling down to 50.2 from previous 51.1.
The EUR/USD pair advanced up to 1.1206 before pulling back some, consolidating nearby by the end of the day, as investors entered in wait-and-see mode ahead of the release of US employment data early Friday.
The Nonfarm Payroll report for September is expected to show that the country added a bit above 200K new jobs in the month, whilst the unemployment rate is expected to hold steady at 5.1%. Technically, the 1 hour chart shows that the price retreated from its 100 SMA, but remains well above a bullish 20 SMA, currently around 1.1160, whilst the technical indicators are losing their upward strength, retreating from near overbought readings.
In the 4 hours chart, the pair topped around a flat 20 SMA whilst the technical indicators remain flat below their mid-lines, lacking directional strength. Upcoming moves will depend purely on the result of the US employment data, although seems unlikely that the report will be enough to set a clear directional move for the upcoming sessions."
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