7 August, 2015
EURUSD price continues to contract and trade within a narrow three day range ahead of today’s U.S. Nonfarm payrolls economic data release. The Bollinger band EURUSD trend analysis on the daily chart indicates that volatility is narrowing, which is typical before the release of a major economic report. Price over the last three trading sessions has stayed below the 20 period simple moving average, however, a bullish cross is observed within the Stochastic Momentum Oscillator indicator. The fact that price remains well contained within the multi-week downward moving channel and the bullish cross observation that has accrued below the Stochastic 20 level indicates oversold market conditions in the short term.
The Bank of England’s first “Super Thursday” sent Sterling down sharply; the BoE left monetary policy unchanged. The BoE is slowly preparing for the first rate hike, however, they are in no rush to move. The GBPUSD closed sharply lower for the day down around 170 pips from the day’s high in the wake of the day’s heavy GBP economic calendar.
The USD backed off during N.Y. trade on Thursday after decent weekly jobless claims gave the USD some early support. Real U.S. GDP grew 2.3 percent in the second quarter, according to the advance estimate from the U.S. Bureau of Economic Analysis. Asian stock markets were mixed in overnight trade, with China and Japan up. The Bank of Japan left policy unchanged, as widely expected.
Currency Pairs, Grouped Performance (% change)
The new Currency Movers Charts show the percentage change from previous day’s close to the current moment against the other major currencies.
The GBP is trading lower against the majors after the BoE highlighted that it’s in no rush to raise rates. The AUD is trading higher as the BoA remains upbeat about the domestic economy, and demand for Australian commodities seems to be improving.
Significant daily support and resistance levels for these pairs are:
Main Macro Events Today
• USD Nonfarm Payrolls: July nonfarm payrolls are expected to increase by 215k, with a 205k private payroll gain. The market risk if payrolls are downward, could impact the timing of rate hikes. If upward, should provide some tail wind.
• USD Unemployment Rate: The unemployment rate is expected to hold steady at 5.3% from June.
The workweek is expected to hold at 34.5 for a fifth month.
• CAD Net Change in Employment: Employment is expected to rise 10.0k in July after the 6.4k drop in June.
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