EUR/USD (1.4160) Zero non-farm jobs created in the US in the month of August is a universally sobering statistic. Despite this, it seemed to take the FX markets an awfully long time to digest its implications. Fully one hour after the publication of the figure on Friday, the euro had still not exited its pre-release price range. Even when it did, it didn’t go too far. One of the reasons for this could have been the last-minute shift in the consensus forecast. We revealed in our last report that a number of analysts had downgraded their forecasts at the last minute, meaning that the real consensus was probably not much better than plus 30,000 anyway. A second factor may have been the attribution of the weak result to the extraordinary factors of the summer: the debt-ceiling debate, the S&P downgrade, and the stock market turbulence. If large firms delayed recruitment decisions in the hope of gaining more visibility, one could hope for some catch-up hiring in subsequent months. Finally, given the proximity of the US presidential elections, observers believe the gravity of the jobs situation in the US is such that the administration will pull out all the stops in this direction in the months ahead.
Although we saw no useful support ahead of 1.4090, the euro has still not challenged this level. Below there, the near-term outlook would deteriorate further and one should look for a move to 1.3970. To the upside, 1.4335 marks the centre of the broader sideways range.
Market Bias Index
In the space of a few days, the CHF has swung from the most undervalued currency to the most overvalued in traders’ perception.
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http://www.easyforexnews.net/wp-content/uploads/2011/09/GDPBD00000191968.pdf
Deutsche Bank
Fixed Income Research – Global