The US jobs report was due to be released on Friday amidst greater expectation and uncertainty than usual surrounding the state of the labour market during the month of January.
There were some unknowns that had awoken investors´ nervousness. First, it was unclear how climate conditions and the persistent bad weather in January might have affected the data. "The only problem with this idea is that the weather in January was worse than it was in December, and has already been reflected in a number of figures that have already been released," said Craig Erlam, market analyst at Alpari UK.
Nonetheless, the ADP report and ISM surveys released earlier in the same week had been broadly in line with expectations and provided little insight looking out to today's release, as analysts at Lloyds Bank noted.
Another issue that would be in focus, as those experts pointed out, were the annual benchmark revisions that held the potential to change the overall picture of the state labour market.
Finally, the question of how the FOMC might react to a low print in the non-farm payrolls figure was also bothering FX investors, given its possible impact on the widely expected recovery in USD.
Analysts at Danske Bank were of the opinion that "the FOMC is more or less on autopilot." So there was little chance that the jobs report would lead them to change their minds as regards a possible reduction in the pace of its bond purchases.
"Moreover, the jobs report for February will be released ahead of the next FOMC meeting," they went on to explain.
Despite the hype, analysts like Craig Erlam felt the market was exaggerating the importance of of this non-farm payrolls figure. In his opinion another number below 100,000 will probably be offset by an upward revision to December's figure and a very strong number once the weather settles down a little. But "that won't stop people overreacting if we see it and panicking about the recovery." he concluded.
EUR/USD may be unable to overcome the 1.3625 / 1.3659 band
A stronger than expected headline payroll print today will likely be USD positive, nonetheless, as Lloyds Banks analysts noted, a major upside surprise - which more than offset the weakness in the December numbers - would likely be needed to see sustained USD gains.
The technical aspect of the EUR/USD is really confusing following Thursday's reaction in the wake of the ECB´s decision and Mario Draghi´s press conference. Carol Harmer, owner at Charmer Charts recommended caution since the direction in the pair was unclear. While the daily charts look bullish, 4-hours ones appear to be overbought, she said.
"Only if we break above 1.3625 would we see buyers storm back into the market and we would then be looking for strength to emerge with 1.3685/90 through to 1.3711," Harmer explained.
Karen Jones, technical analyst at Commerzbank, set the resistance to watch a little further: In her view, the market may halt ahead of 1.3659. "The intraday Elliott wave count suggests failure will be seen, but in order to reassert downside pressure a close below the 55-month support at 1.3570 is needed," she concluded.