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After Wednesday's tops in the proximities of 1.3020, the euro upside has faltered and fell since then to test levels around 1.2880 on shrinking risk appetite and widespread lulls, derived from both the lack of a relevant calendar and rumors, quite useful sometimes to bring in bouts of action to the markets.

There is a palpable sense of optimism buoyed by yesterday improvement in the U.S. manufacturing ISM and the ADP report, beating estimates after the private sector has added 158K jobs. Jobless Claims also smiled at the markets, falling to 363K in its weekly variation. Echoing same tone, Consumer Confidence in October up-ticked to 72.2, leaving behind the previous print. All seems on schedule for the big day in the FX markets … at least in that side of the Atlantic. On the other shores, the slightest attempt of a smile is still far away in the eurozone, submerged in the Spanish and Greek sea of uncertainty while recession is entrenching, as shown by the PMI prints well within contraction territory. As Derek Halpenny at BTMU puts it "PMI manufacturing reports will be released across much of Europe this morning and will once again confirm weakening economic growth. Greece will be increasingly in focus in the week ahead with pressure on the Greek government to pass austerity measures ahead of the euro-group meeting on 12th November".

… Pressure points down, any room for surprises?

EUR/USD is navigating in a range delimited by September highs just above 1.3170 and October lows in the boundaries of 1.2800.

True is that NFP figures have the overwhelming effect of eclipsing any bad news - euro bloc PMI data, for example - or accentuating them. Christin Tuxen, Senior Analyst at the Nordic Danske Bank, comments "it is too premature for markets to view positive U.S. data surprises as dollar positive as the Fed is set to be in the market for the long run; thus we think the fair reaction to a positive payroll report would be for investors to abandon the safe haven of the dollar".

Expert Karen Jones at Commerzbank, assesses that short-term technical studies would be hinting an upside ahead, probably targeting the area at 1.3025/45 and 1.3122 in the near term. She expects "failure here and remain negative - attention remains on the 1.2803/32 (200 day ma and October low). Failure here would be viewed as negative, and target 1.2472/33."

In-house developed Bullish Percentage Index (NYSE:BPI) has printed 21.05, below the 30 threshold indicative of oversold territory, signaling that only over 20% of euro-based pairs remain in bullish mode on point and figure charts.

One thing remains clear though, and is that after the employment data in the first economy is published, this almost unorthodox week for the euro traders will finally have run its course.

… Looking over the weekend

Risk trends will kick off on Monday after the Services PMI in China, preceding the Unemployment Change in Spain. Investor Confidence in November is expected to 'improve' to -18.0 in the eurozone from -22.2 according to the Sentix index. In the US, the only release will be the ISM-Non Manufacturing PMI.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Source: Euro Vs. NFP ... The Lull Before The Storm?