With the market still recovering from the European Central Bank and Mario Draghi's press conference, today the attention shifts to the US jobs report as markets look for signs of a post-winter rebound.

The consensus estimate is for a rise in non-farm payrolls to between 200,000 and 210,000 and for the unemployment rate to fall from 6.7% to 6.6%. As noted by analysts at Lloyds Bank, this is "above last year's monthly average of 194K, although after the sluggish growth seen in the last three months it would be surprising not to see some further 'catch-up' over the next few months as well."

Friday's price action shows that currency investors are positioned for a strong non-farm payrolls report, as explained by Kathy Lien, managing director at BK Asset Management.

"Almost everyone thinks payrolls increased last month because jobless claims have been low, weather related distortions faded and the Federal Reserve tapered asset purchases in March," she said.

In her view, if payrolls increase above consensus by 225,000 or more, the immediate reaction in currencies will be seen in the USD/JPY as it attempts a run for 105. "If it comes in anywhere between 195k and 220k, the impact on the greenback would be small but still positive," she alerted. However, "should payrolls rise by less than 150k, the dollar will weaken and 104 should become the top for USD/JPY," she concluded.

A strong USD would also send EUR/USD below 1.37, probably towards nine-month support at 1.3679. The cross came under pressure following a hardened dovish bias from the ECB. According to Karen Jones, technical analyst at Commerzbank, the pair sold off on Thursday following the recent failure at the 1.3820/50 band. "The 55 day ma at 1.3724 and the 1.3705 low from the end of March have been eroded to leave 1.3679 in the firing line," she said.

Carol Harmer, director at Charmer Charts, sees scope for the pair to fall to 1.3666. She also believes that if 1.3666 does hold the spike lower we should be able to climb back up over 1.3720 and look for 1.3741/50 initially.

Nonetheless, both Harmer and Jones opined that if those supports don't hold, the cross would eventually trade towards 1.3602 and 1.3560.

NJ

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