The markets have huge expectations from today’s non-farm payroll change data, not like last month but still high. EURUSD is already taking losses. But how EURUSD is reacting to the data. If we examine the past 1 year, the average reaction is just under the %0. In the chart above, the white line is showing the average while green and red lines represent plus and minus 2 standard deviation lines for the 6 hours after the data announced. The EURUSD’s percentage reaction will be expected to stay between the 2 standard deviations. But this is not always the case.
In the chart above the red line is representing the May of 7th data response (Expected:1000k Actual: 266k), the blue line is representing the April of 2nd (Expected:660k Actual: 770k) and the green line is representing the March of 5th data (Expected:200k Actual: 536k). April data had come in a low volume market because of the holiday so it can be ignored. In March, EURUSD has already fallen before the data, after the announcement EURUSD fell around %0.20 in the 6-hour window. In May, EURUSD was just bounced from the trend line and want to go up but markets expect huge data. According to the Bloomberg survey median was 1000k but the unofficial expectation was much higher. But the data announced 266k and it was one of the biggest data surprises ever seen. Because of the uptrend and huge surprise, EURUSD moved above 2-standard deviation and completed the 6-hour period with a %0.80 gain.
Today, markets expect a 674k payroll change. Still a high number but achievable. The uptrend has broken this week and EURUSD is testing 1.21. If the down move continues after the data, Fibonacci %38.2 and %50 levels can be followed as targets. They are not just Fibonacci levels, but last bottoms as well. 1.1985 will be key for the medium-term direction.
For upward moves, 1.22 is the first key resistance level. Above that, a pull-back to the broken trend can happen.