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A number of economists are of the consensus that the snowstorms that hit the eastern half of the nation in the second week of February could depress employment by as much as 150,000,and I agree more with the bloggers of MarketWatch when they claim that this will have a temporary impact, with a large bounce back in March.

With the upcoming releases, the NFP is projected to be -40 versus the previous -20, I am more inclined to rule that there are three possibilities in the direction of the EUR/USD pair.

The currency still appears bearish in the long term, but range bound in the medium term, trading between 1.3750(resistance) and 1.3450(on support).

I expect the currency to trade within this range for the time being until the NFP is released, a surprisingly negative data will cause the Euro to gain some ground on the dollar which has been strengthening for the past few weeks due to the trend changing data released in December. This bear trend has continued despite the fact that the January data was more negative than the consensus; otherwise, if the NFP is more positive than expected or less negative, then the 1.3450 support levels will be broken giving credence to the already strengthening dollar.

I would short the euro on the following supporting points.
  The NFP confidence level doesn’t appear likely to be broken to the extent of surpassing December 2009 levels. The NFP release is therefore likely not to be a long term trend determinant.

   Euro zone has not solved all the financial problems its member states are facing and due to the gargantuan budget deficits the PIIGS have has become a malady to EU.

This shows that Greece is just a small part of the bigger picture. The bigger picture is still not completely painted because the artist seems to be more concerned with the position his seat is other than completing the painting.

Europe’s recovery almost stalled in the fourth quarter as waning spending and investment in Germany unexpectedly brought growth in the region’s largest economy to a halt. Gross domestic product in the 16-nation euro region rose 0.1 percent from the third quarter, when it gained 0.4 percent, the European Union’s statistics office in Luxembourg said. The recession in Greece deepened, with GDP falling 0.8 percent in the fourth quarter after a 0.5 percent slump in the previous three months.

European governments are struggling to contain the fall-out from Greece’s budget crisis as they phase out the stimulus measures used to pull the economy out of a recession. As market turmoil pushes bond yields higher across southern Europe, the recovery is in danger of losing momentum.

From a year earlier, euro-area GDP declined a seasonally adjusted 2.1 percent in the fourth quarter. For the full year, the economy contracted 4 percent. Separate data showed that industrial production in the region fell 1.7 percent in December, the most in 10 months.

The German economy stagnated in the fourth quarter after recording 0.7 percent growth in the previous three months, while Italian GDP fell 0.2 percent. France’s economic expansion accelerated to 0.6 percent from 0.2 percent. Greece revised down its data for GDP for the first three quarters of 2009, indicating its recession was deeper than earlier thought.Europe’s governments face a growing dilemma as they seek to fortify recoveries at a time when rising sovereign-debt burdens threaten to hobble expansion. EU leaders ordered Greece to get its deficit under control and pledged “determined and coordinated action” to protect the currency region in a statement that stopped short of setting out concrete steps.

 Further on, I would like to add to the three basic reasons that

 >In the third quarter of 2009, the Euro Area economy emerged from the worst recession since World War II. Yet, during the last few weeks, the single currency union has been facing the biggest challenge since its establishments as lower tax revenues started bringing fiscal deficit in some member countries to unsustainable levels.


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