Chart of the day - EURUSD (01.04.2022)

Release of the US labor market data for March is a top macro event of the day. NFP report will be released in the early afternoon, at 1:30 pm BST. Market expects a non-farm employment change of +475k, much weaker than 678k reported in February. However, this is still relatively high reading and should expectations be confirmed by actual reading, a 50 basis point Fed rate hike in May may be a done deal. In fact, economists do not expect that even a big miss would discourage Fed from delivering a 50 basis point tightening in early May. Having said that, scope for a negative USD reaction even in case of a major miss may be limited. Wage growth is expected to accelerate from 5.1 to 5.5% YoY, showing that inflationary pressures continue to mount. 

Taking a look at EURUSD chart at D1 interval, we can see that the main currency pair have been trading in an ascending triangle pattern as of late. Resistance zone ranging above 1.1130 handle serves as an upper limit of the pattern, and is additionally strengthened by the upper limit of a local market geometry. The pair made another test of this hurdle earlier this week but once again failed to break above. A recent local low in the 1.0980 area coincides with the short-term upward trendline that serves as the lower limit of the pattern and should act as a key near-term support. Elevated volatility is expected near the NFP release time (1:30 pm BST).

Source: xStation5