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Wednesday, December 6th
The EUR/USD pair failed to keep its yesterday’s recovery trend and once again came under selling pressure, moving closer to its 2-week lows, marked near the level of 1.1800 a day before. Renewed pair’s weakness is mainly attributed to attempts of the US dollar to recover its positions after yesterday’s drawdown, which was triggered by dovish remarks of Fed member Charles Evans, who offered not to rush on Fed monetary policy tightening. However, fresh wave of risk aversions amid the latest North Korea headlines provided some support to the euro and as a result limited pair’s retreat. Today all traders’ attention will be focused on the US ADP report, which will provide investors with clues on what to expect from the key event of this week – NFP date release.
The GBP/USD pair remains offered for the second day in a row, slipping below the level of 1.3400. In Asia, the pair accelerated its decline amid news reports of an attempt to assassinate the UK PM Theresa May by the Islamist terrorists. Fortunately, the British security services managed to prevent the upcoming assassination attempt on the PM. Moreover, broad risk aversions, backed by renewed political tensions between the US and N.Korea, and ongoing uncertainty around Brexit are also collaborating with pair’s decline lately. On the other hand, broad downside correction of the US dollar, triggered by yesterday’s dovish remarks of Fed member Evans, lent some support for the pair, thus limiting its losses. Looking ahead, today traders’ attention will remain focused on the data from the US labor market, while widespread sentiments, driven by recent Brexit progress, or its absence, will remain the key driving factor for the pair on Wednesday.
The USD/JPY pair remains one of the weakest assets of Asia on the back of several bearish factors, which are navigating the market at the equator of this week. Yesterday the pair came under wave of selling pressure on the back of another US dollar correction across the market, having refreshed its weekly lows in the region of 112.00 mark. Moreover, renewed risk-off sentiment, triggered by recent North Korea headlines, saying that latest US actions are a provocation of a nuclear war, also contributes to pair’s downside trend. Now all traders’ attention shifts towards the US ADP Nonfarm Employment Change numbers for fresh trading opportunities ahead of the key NFP report due out on Friday.
The AUD/USD pair once again was showing volatile dynamics during the Asian trading session, this time in wake of negative Australian data. Earlier today, the pair came under strong selling pressure, having refreshed its 3-day lows, after Australia published disappointing GDP results. Moreover, prevalent risk-off moods, triggered by latest headlines from Korean Peninsula, drives flows away from higher-yielding assets, such as the Aussie, thereby adding some extra pressure on the pair on Wednesday. On the data front, today all eyes remain on the US ADP jobs report, which is considered as a preview of the key report from the US labor market – NFP, which will be released on Friday.
The main events of the day:
US ADP Nonfarm Employment Change – 15.15 (GMT +2)
BoC Interest Rate Decision – 17.00 (GMT +2)
US Crude Oil Inventories – 17.30 (GMT +2)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1758 R. 1.1910
USDJPY S. 112.11 R. 113.09
GBPUSD S. 1.3321 R. 1.3537
USDCHF S. 0.9815 R. 0.9915
AUDUSD S. 0.7560 R. 0.7676
NZDUSD S. 0.6821 R. 0.6935
USDCAD S. 1.2583 R. 1.2757
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