Starting from the EBC,  the decision was made to leave interest rates unchanged at the level of 1% and EBC chairman Jean Claude Trichet mentioned that the EBC is not planning to neither increase its asset purchase plan nor cut rates, as the economy is showing signs of recovery. On the other hand the market received mixed data from the US economy, with better than expected readings from the ISM manufacturing PMI, the ISM non manufacturing PMI, pending homes sales and last but not least the non-farm payrolls. 345 thousand work places were cut, whilst the market expected a fall of 520 thousand workplaces. This came as quite a surprise as Wednesdays ADP non-farm employment change reading signaled that investors could expect a worse than expected reading on Friday.  What has to be mentioned, is that the unemployment rate amounted up to 9.4% against an expected reading of 9.2%. Owing to this the EURUSD behaved calmly during the beginning of the week awaiting significant data from the US labour market, but after the reading plummeted below significant support levels signaling that a continuation of this decrease movement can be expected during the next week. The current target for the market is reaching the level of 1.3792. What has to be kept in mind though, is that if global stock markets  continue their increase run, then this may be a factor that could in the shorter term return the EURUSD to its increase movement.

Omar Arnaout