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Friday, September 1st
The EUR/USD pair continues to stay under selling pressure lately, however, having bounced off its weekly lows, marked yesterday at 1.1823 level. According to recent headlines, ECB members begin to show concerns about stronger positions of the euro that negatively affects the pair, forcing it to expand retreat from its multiyear highs, posted earlier this week. These recent news have forced the market to reconsider its expectations regarding tapering ECB's QE program, and since the regulator's meeting will take place next week, the single currency reacted sharply to these speculations. However, expected that the pair won’t show any sharp moves during European trading session, as investors refrain from placing any important directional bets ahead of key events. Today the US will release the NFP data report, which will become the main catalyst for the pair during this trading session.
The GBP/USD pair stalled its yesterday’s growth and returned back to its comfort zone, located near the level of 1.29, as the US dollar seems to have recovered a smile against its main competitors. The pair eased part of its overnight gains and by the moment of writing was trading in the region of 1.2910-20, as markets have passed over yesterday’s weak data from the US housing market, allowing the US dollar to recover part of its positions. Adding to this, slight concerns over Brexit negotiations weighs the pound at the last working day of this week, as both UK and EU remained unsatisfied by slow progress in the negotiation process after last meeting on the back of struggling to reach an agreement over the size of the “divorce bill”. Looking ahead, expected that the pair will continue to stay under pressure, as all traders’ attention now is glued to the crucial US jobs report, keeping the market in cautious stance, as this data release will be able to indicate further Fed monetary policy steps. Besides the NFP report, the UK manufacturing PMI will also be able to bring some short-term impetus to the pair during European trades.
The Loonie remains the top gainer of this Asia, having recovered the most part of its weekly losses in the pair with the greenback. The USD/CAD pair has lost nearly two cents since its yesterday’s highs, as investors are still digesting recent reports from both neighboring economies, which showed positive results of Canadian GDP and drop in US home sales. Moreover, recent recovery of oil prices also positively affected positions of commodity-linked Canadian currency. On the other hand, further drop of the pair looks unlikely, as better tone around the US dollar and widespread cautiousness, backed by upcoming crucial data from the US labor market, are capping pair’s further traction. On the data front, today all eyes will be focused on the risky NFP data release, which is scheduled on 15.30 (+3 GMT), for some fresh short-term trading opportunities.
The AUD/USD pair trades with a bearish bias on the last day of this working week, failing to benefit from slightly improved risk appetite, underpinned by better-than-expected Chinese Caixin manufacturing PMI. The recovery of the US dollar after yesterday’s disappointing data remains one of the key driving factors, thereby negatively influencing the pair lately. However, any further sharp moves of the major will remain capped amid persisting nervousness ahead of the key event of this day – the NFP report, as according to investors’ opinion it will be able bring some fresh clues regarding further Fed monetary policy developments. Also today, investors will see the US ISM Manufacturing PMI data, however, expected that the reaction on it will be limited due to more important events, scheduled ahead in the session.
The main events of the day:
German Manufacturing PMI – 10.55 (GMT +3)
UK Manufacturing PMI – 11.30 (GMT +3)
US Nonfarm Payrolls – 15.30 (GMT +3)
US Unemployment Rate – 15.30 (GMT +3)
US ISM Manufacturing PMI – 17.00 (GMT +3)
Support and resistance levels for the major currency pairs:
EURUSD S. 1.1792 R. 1.1970
USDJPY S. 109.37 R. 110.95
GBPUSD S. 1.2823 R. 1.2989
USDCHF S. 0.9519 R. 0.9713
AUDUSD S. 0.7843 R. 0.8001
NZDUSD S. 0.7093 R. 0.7251
USDCAD S. 1.2354 R. 1.2728
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