EUR/USD longs hope Sept payrolls echo ISM services jobs, claims data
Oct 3 (Reuters) -EUR/USD traded lower Thursday despite a round of U.S. employment data suggesting weakness in the jobs market, leaving Friday's non-farm payrolls report key for longs.
Weekly jobless claims came in at 225k versus 220k estimates and rose from last week's upwardly revised 219k.
Headline ISM non-manufacturing forSeptember came in at a 1-1/2-year high of 54.9 versus estimates for 51.7, but the jobs component dropped to 48.1 against 50.2 in August -- indicating that employment in the service sector contracted last month.
The jobs data helped erode some gains for U.S. yields US2YT=RR and subtract from earlier widening of German-U.S. 2-year spreads US2DE2=RR.
Those influences helped mute the bearish response to headline ISM data and the prices paid component, which increased to 59.4 from 57.3.
EUR/USD longs are hoping the September payrolls report due Friday can keep them in the game.
Non-farm payrolls are expected to have increased by 140k in September versus 142k in August, according to the Reuters consensus forecast. Estimates range from 70k to 220k.
A below-estimates result could lead U.S. yields to erase some of their recent gains, leading German-U.S. spreads to reverse much of their recent widening.
If so, EUR/USD could make a run higher towards 1.1200.
However, an above-estimate result could drive EUR/USD through key support near 1.1000 and trigger stops. Shorts may then target the 1.0775/1.0800 zone.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)
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