FX.co ★ EUR/USD. Forecast for March 11, 2013

Despite Nonfarm Payrolls in February grew surprisingly 246K against forecast for 161K, the situation on the US labor markets is far from optimistic. January’s data as we mentioned in early February was revised downwardly to 119K (it was reported about 157K). For the last 3 months reduction in the number of labour force (taking into consideration those who retired and other reasons) accounted for 393K and the growth was 191K, i.e. the growth is 63.5K workplaces per month. If February’s Nonfarm Payrolls are revised downwardly, the situation will be complicated. The unemployment rate was down from 7.9% to 7.7% it was precisely due to reductions in the number of labour force. Meanwhile, the Fed stated that decrease in the number of unemployed should not be the result of the decrease in the number of labour force. Thus, investors should not fear the QE will be reduced earlier. Moreover, in the short term it will not be possible to manipulate statistics as freely as it was, as labour force will decrease and data in March will be weak.

Nevertheless, publishing Nonfarm Payrolls, the aim was fulfilled, S&P 500 grew 0.44%. The euro dropped 100 points. The pound lost 90 points, the Aussie lost 30 points, the Canadian dollar grew 10 points. Probably, such an unusual reaction was a result of prepared speculation.

Italy’s credit rating was cut one level by Fitch Ratings amid inconclusive election held in February. The Italy’s government bond rating was lowered to BBB+ from A- with a negative outlook.

As for the US market, the correction and the growth are expected here.

Today at 11:00 GMT+4 German Trade Balance in January is published, it is forecast to be 17.9 bln against 16.8 bln in December. At 11:45 GMT+4 Industrial production in France in January is released. It is expected to be flat (-0.1%).

From the technical point of view, after the price consolidates under the indicator lines on the H4 (1.3012), the growth may be to the level of Fibonacci 1.3052/58, then to the level of 1.3117. Test of support on the H4 1.2936 is probable. Anyway, there are no accurate technical terms for local swing, we expect it to form.