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The heavy week of FX data nears its end as tomorrow brings Non-Farm Payrolls out of the United States for the month of July. Wednesday’s FOMC rate decision brought little by way of new information to markets, but it did end up driving a wave of US Dollar strength as the currency is now testing-above the 95.00 level on DXY for the first time in two weeks. The Euro fell significantly during early trading on Thursday but found enough support at the 1.158 level which helped the pair to attempt rebound movement. The market will continue to be very noisy and the pair is expected to remain trapped in July’s wide price band limits, at least until jobs number are out later today. The pair is currently on defensive ahead of NFP data update. The currency pair closed at 1.1584 on Thursday, confirming a downside break of the 1.5-month-long pennant pattern. So, the doors are open for a drop to 1.15 and the move will likely happen today if the US non-farm payrolls and wage growth number betters estimates.
USD Bulls Gain Overwhelming Support From Sino-US Trade War Predictions As Investors Focus on NFP Data
On the other hand, a weaker-than-expected print may allow EUR/USD to re-test the resistance at 1.1627 (lower end of the pennant), although bulls are cautioned against being too ambitious as the gains could be short-lived, courtesy of CNY slide. A sustained rally in the EUR/USD looks likely if CNY stages a sharp corrective rally and the US data misses estimates by a big margin. The data scheduled for release today at 12:30 GMT is expected to show that the US economy created 190K jobs in July compared to 213K jobs created in June. Meanwhile, wage growth or average hourly earnings are seen rising 0.3 percent month-on-month in July, up from the 0.2 percent rise in June. And last but not the least, the jobless rate is seen falling to 3.9 percent from 4.0 percent. As of writing this article the eurusd pair is trading at 1.1591 up 0.05% when compared to yesterday’s closing price.
The dollar stayed firm against the yuan and a basket of currencies on Friday, with markets gripped by worries over escalating trade tensions between the United States and China as China vowed on Thursday to retaliate if the U.S. acted on a threat to raise tariffs on the Asian nation’s exports. Investors also remain cautious ahead of the July U.S. jobs report due later on Friday, which will give a reading on the health of the world’s largest economy and possible clues about the pace of Federal Reserve interest rate rises. Analysts and traders outlook at Sino-US trade war outcome is supportive of strong US Greenback which resulted in investors begining to horde US Greenback which has greatly helped USD bulls. When looking at pair from technical aspect, the hourly RSI has breached the descending trendline in favor of a minor corrective rally. However, the overall bias is bearish as indicated by the downward sloping Bollinger bands. Expected support and resistance for the pair are at 1.1575, 1.1550, 1.1510 and 1.1615, 1.1645, 1.1675 respectively.