Event Risk - Chapter Two

All eyes will be focused on the US non-farm payroll numbers today. The consensus is for a nice rebound from the August contraction. In any event, look for considerable volatility in the market when the data are released. Anything but a positive surprise still has the possibility of plunging the US dollar lower. The US is clearly in an economic slowdown, the housing market is in dire straits, and a cut in interest rates by the Fed is but a foregone conclusion. Numbers that are in line with estimates could still see a major spike in the EUR/USD currency pair. We see pair currently close to Fin resistance at 1.4130. We will look to play the news to the downside, or not at all. In our view, the odds favor additional consolidation, at best.