EUR/USD higher and steady before US non-farm payrolls data

Euro continued its expansion against the US dollar on Friday, as markets focused on highly anticipated non-farm payrolls and unemployment indicators from the United States later in the day.

EUR/USD pair hit 1.3269 during late Asian trade, currently session high, after which consolidation followed at 1.3250-1.3255. Support was expected at 1.3190-1.3210, while resistance was to be met at 1.3275-1.3300.

The euro received support after Thursdays monthly meeting of the European Central Bank (ECB) introduced no change in the benchmark interest rate, as it was left at a record low level of 0.50%, after ECB decreased it by 0.25% in May.

Additional positive impulse for the single currency was submitted by ECB President Mario Draghi who said, that Euro zone’s economic recovery was expected to begin later this year. ECB revised down its forecast, regarding economy in 2013, and announced that the Gross Domestic Product would probably shrink by 0.6% in comparison with the previously projected 0.5%.

Today it was reported that Germanys Trade Balance increased to 18.1 billion EUR in April, surpassing projections that the increase would be 17.0 billion EUR. However, trade surplus slowed down in April in comparison with the March data, 18.8 billion EUR. It became clear that German export rose by 1.9% in April on a monthly basis, far above expectations for a mere 0.1% rise. Import rose by 2.3% in April, compared to March, also exceeding forecasts for a 0.5% increase.

Additionally, on Friday Bundesbank revised down its forecast, regarding German growth in 2013 and 2014, stating that structural problems remained the major obstruction for a stable development. The central bank predicted that German economy will expand by 0.3% during the current year, while the previous estimate showed a 0.4% expansion. Germanys GDP is expected to rise by 1.5% in 2014, a revision downward from 1.9%.

Meanwhile, Thursday official data from the United States showed that Initial Jobless Claims dropped slightly than expected during last week. The number of people, who filed for unemployment assistance, fell by 11 000 to 346 000 during the week until June 1st 2013, missing projections that the number would drop to 345 000. Initial Jobless Claims were revised to 357 000 during the preceding week.

Later today US Unemployment Rate and Non-Farm Payrolls indicator in May are expected to be released. On Wednesday official report stated that US non-farm private sector added fewer than expected job positions in May, as this employment report by ADP is usually a signal what the possible development in Non-Farm Payrolls could be.