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Monday, August 7th
Today the EUR/USD pair managed to recover part of its positions, as US bulls have took a breather, allowing investors to lock in some profits after sharp drawdown, led by better-than-expected NFP results. However, the pair met strong resistance at its psychological level of 1.1800, as market participants seem still digesting Friday’s solid jobs data from the US. Positive data from the NFP report led to stronger confidence in the US economy and increased odds for a Fed rate hike in December. As a result, the divergence factor between Fed's monetary policy and the ECB has again come into play, thereby weighing the pair. Nothing important is scheduled in data calendar for today, so broad market trend will remain as an exclusive determinant for the pair at the beginning of this working week.
The GBP/USD pair is following market sentiments and is recovering the smile this Monday after a hard week for the pound. The pair lost more than two figures since Thursday’s tops, as the dovish outcome of the BoE meeting on Thursday and solid numbers of Friday’s NFP report heavily weighed on the pair. Moreover, these recent events boosted talks over divergence between monetary policies of the Fed and BoE that also collaborates with pair’s recent weakness. With only a few secondary reports from the UK and several Fedspeaks, which are expected later ahead, the pair will continue to follow USD dynamics, while any headlines regarding Brexit developments will be able to bring some impetus to the pair.
The AUD/USD pair breaks a streak of four consecutive downside sessions from the region of its 2-year highs and remains better bid at the start of this trading week. Today the pair attempts to correct higher after excellent data from the US labor market, which forced the major to lose almost a cent and refresh its nearly 2-week lows at 0.7891 spot on Friday. However, further correction appears fragile, as cautious stance of the CB of Australia, reflected in the Bank’s Statement of Monetary Policy, eased market’s expectations on RBA’s possible rate increase, which in turn is lending negative pressure on the Aussie lately. Looking ahead, economic calendar of the US will keep silence at the first working day of this week, so broad market trend and risk-friendly environment will continue to determine pair’s further course.
Bitcoin continues to surprise the market, having hit its record highs at 3326.20 level on Saturday, while its market capitalization stepped over 50 billion USD. Seems that investors have digested recent news that the cryptocurrency split into two parts, creating new asset called "bitcoin cash", after the fork was confirmed. However, the new cryptocurrency was not so successful as her “Older brother”, as, according to the latest developments, customers need to wait until Jan 2018 to access their new coins. It is expected that further developments surrounding the cryptocurrency will continue to navigate Bitcoin. Currently Bitcoin is trading in the region of 3230, which is more than 20% higher than last week lows.
The main events of the day:
None
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1635 R.1.1957
USDJPY S. 109.31 R.111.73
GBPUSD S. 1.2932 R.1.3214
USDCHF S. 0.9626 R.0.9814
AUDUSD S. 0.7845 R.0.8021
NZDUSD S. 0.7357 R. 0.7481
USDCAD S. 1.2504 R. 1.2738
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