Forexpros – The euro traded flat to higher in early U.S. trade Friday as investors await the critical U.S. non farm payroll number and Spanish concerns weigh.
EUR/USD moved in a tight range, in light holiday trade between a low of 1.3054 and a high of 1.3078 while trading up 1.3069 up 0.02% at the time of this writing.
The pair was likely to find support at 1.3048, the low of March 16 and resistance at 1.3238, the session high.
Anticipation is high for the release of U.S. non farm payrolls at 8:30 am New York time before many traders take off for the long Easter holiday weekend.
Analyst’s are expecting U.S. non farm payrolls to increase by 205,000 based on the ADP report Wednesday.
The jobless rate is forecasted to have held a three year low of 8.3% in a separate report released today.
Investors can anticipate strength to be supported in the greenback should these figures be exceeded when the data is released.
Sentiment on the euro was hit by concerns over the debt crisis in the euro zone, after a poorly received auction of Spanish government debt earlier saw the country’s borrowing costs rise.
Spain’s Treasury auctioned EUR2.59 billon of government bonds, short of the maximum targeted amount of EUR3.5 billion, in the country’s first debt auction since last week’s austerity budget.
Following the auction, the yield on Spanish 10-year bonds climbed to 5.7%, up from 5.5% before the sale.
On Tuesday, Spain’s government announced that the country’s public debt will rise to a record 79.8% of gross domestic product this year.
These results forced Spanish Prime Minister Rajoy to state that the economy is in extreme difficulty thus raising the spectre of a possible bailout.
Meanwhile, concerns over the outlook for growth in the euro zone mounted following a flurry of weak economic data earlier in the week.
Government data confirmed that the euro zone service sector contracted for the sixth time in seven months in March, increasing the likelihood that the economy has entered a technical recession.
The final euro zone services purchasing managers’ index was revised up to 49.2 in March, from a preliminary estimate of 48.7, but remained below the 50 level that separates contraction from expansion.
A separate report showed that euro zone retail sales fell by 0.1% in February, against expectations for a 0.1% increase and were 2.1% lower year-on-year.
The euro traded higher against the yen, with EUR/JPY climbing 0.04% to hit 107.59 but weaker against the pound, with EUR/GBP giving back 0.12% to hit 0.8246.
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