GBP/USD Promises Push Higher Post Morning Star Candlestick Pattern (based on dailyfx article)
GBP/USD’s promises a further push higher following a Morning Star
formation on the daily. With current levels not witnessed since 2008,
definitive areas of resistance are not easily identifiable. This
suggests traders may defer to psychologically-significant handles to
look at taking profits and puts 1.7200 on the radar.
Dollar supported before jobs data, Aussie slides after RBA comments
The dollar held firm
above a recent eight-week low on Thursday, supported by hopes
for a healthy rise in nonfarm payrolls, while the Aussie fell
after Australia's central bank chief warned that markets are
underestimating the risk of a sharp fall in the currency.
Figures from U.S. payrolls processor ADP released on
Wednesday added to a string of bullish U.S. data ranging from
manufacturing to auto sales, supporting the view that the U.S.
economy has bounced back smartly after a first-quarter slump.
Benchmark U.S. Treasury yields rose to the
highest in over a week at 2.63 percent on Wednesday in reaction
to the data, which in turned helped lift the dollar against a
basket of major currencies.
The dollar index inched up about 0.1 percent to 79.999
, having pulled up from an eight-week trough of 79.740
plumbed on Tuesday.
Against the yen, the greenback rose 0.1 percent to 101.87
yen, having only recently hit a six-week low near 101.23.
ADP said private employers added 281,000 workers to payrolls
last month, the largest since November 2012, offering hopes for
a healthy rise in nonfarm payrolls when the data is released
later on Thursday.
"Our economists agree with market consensus looking for
non-farm payrolls to rise by more than 200,000 for a fifth
consecutive month," analysts at BNP Paribas wrote in a note to
"If the forecast turns out to be correct, this will mark the
first five-month run of above 200,000 prints since January
The euro eased 0.1 percent to $1.3648. The single
currency hovered below a six-week high of $1.3701 set earlier
this week, as the market turned its focus to a meeting by the
European Central Bank later on Thursday, as well as the U.S.
The ECB is unlikely to take fresh policy action at its July
gathering after cutting interest rates to record lows last month
- the deposit rate to below zero - and revealing a 400
billion-euro ($545.62 billion) loan programme.
"Although no action is expected from the ECB at its meeting
today, we anticipate that it will maintain its dovish tone in
the face of weak PMI prints, low inflation, and weak bank
lending," said analysts at BNP Paribas.
The Australian dollar fell 0.7 percent to $0.9377.
The Aussie pulled further away from an eight-month peak of
$0.9505 set on Tuesday, coming under pressure after Reserve Bank
of Australia Governor Glenn Stevens warned investors they were
underestimating the risk of a significant fall in the Australian
A weak reading on Australian retail sales also added to the
already soft tone of the Aussie dollar, which had retreated on
Wednesday on profit-taking in the wake of disappointing
Australian trade data.
The Aussie's drop below $0.9400 triggered stop-loss selling,
said Jeffrey Halley, FX trader for Saxo Capital Markets in
"Basically, Governor Stevens timed his talking down of the
Australian dollar perfectly to coincide with a soft market,"
While the Aussie may find some support at levels around
$0.9370 and $0.9355, a drop to $0.9300 is now on the cards,
2014-07-03 01:00 GMT (or 03:00 MQ MT5 time) | [AUD - RBA Gov Speech]
[AUD - RBA Gov Speech] = Due to speak at the Australian Conference of Economists and the Econometric Society of Australasian Meeting, in Hobart. As head of the central bank, which controls short term interest rates,
he has more influence over the nation's currency value than any other
person. Traders scrutinize his public engagements as they are often used
to drop subtle clues regarding future monetary policy.
RBA Stevens: Repeats AUD high by historical standards
Comments from Reserve Bank of Australia (RBA) Governor Stevens, to
the Australian Conference of Economists (ACE) and the Econometric
Society Australasian Meeting (ESAM), Hobart:
Trading the News: European Central Bank (ECB) Interest Rate Decision
The EUR/USD may struggle to maintain the rebound from June should the
European Central Bank (ECB) adopt a more dovish tone for monetary
Why Is This Event Important:
Indeed, ECB President Mario Draghi make a greater effort to weaken the
Euro as the resilience in the single-currency heightens the threat for
deflation, but the central bank may refrain from laying out a more
detailed easing schedule as the central bank monitors the impact of
negative deposit rates.
We may get more of the same from the ECB as the pickup in private sector
consumption paired with the downtick in unemployment raises the
fundamental outlook for the monetary union, and the EUR/USD may continue
to appreciate in July should the Governing Council adopt a more neutral
tone for monetary policy.
Nevertheless, the ECB may sounds increasingly dovish this time around
amid the persistent weakness in private sector lending along with the
downturn in confidence, and the Euro may come under increased pressure
in the second-half of the year should the central bank show a greater
willingness to implement the non-standard measures (T-LTRO & QE)
ahead of schedule.
How To Trade This Event Risk
Bullish EUR Trade: ECB Softens Dovish Tone & Sticks to Current Policy
EURUSD M5 : 82 pips range price movement by EUR - Interest Rate news event :
The European Central Bank pushed into uncharted territory as the
Governing Council cut the benchmark interest rate to 0.15%, pushed
deposit rates into negative territory, and saw scope for more
non-standard measures (T-LTRO & QE) in an effort to stem the risk
for deflation, while encouraging private-sector lending to small and
medium-sized enterprises (SME). The EUR/USD tumbled to 1.3501 following
the initial announcement, but the single currency traded higher
following the press conference with President Mario Draghi as the
central bank refrained from announced a detailed schedule for its easing
Trading the News: U.S. Non-Farm Payrolls
U.S. Non-Farm Payrolls (NFP) are projected to increase another 215K in
June, but the European Central Bank (ECB) interest rate decision may
spark a mixed reaction in the EUR/USD as market participants weigh the
outlook for monetary policy.
Despite expectations of seeing the longest stretch of 200K+ prints since
1999-2000, it seems as though we would need a more meaningful pickup in
job growth for the Federal Open Market Committee (FOMC) to soften its
dovish tune for monetary policy, and the bearish sentiment surrounding
the greenback may continue to take shape going into the Fed’s July 30 as
Chair Janet Yellen remains reluctant to move away from the highly
accommodative policy stance.
The pickup in private sector hiring along with the ongoing improvement
in business confidence raises the scope for a better-than-expected NFP
print, and a strong employment read may mitigate the bearish sentiment
surrounding the USD as it puts increased pressure on the Fed to move
away from its easing cycle.
However, the slowdown in private sector consumption paired with the
persistent slack in the real economy may continue to drag on job growth,
and a weak NFP figure may trigger selloff in the greenback as it raises
the Fed’s scope to retain the zero-interest rate policy (ZIRP) beyond
How To Trade This Event Risk
Bullish USD Trade: NFPs Rises 215K+; Unemployment Holds Steady
May 2014 U.S. Non-Farm Payrolls
The U.S. economy added another 217K jobs in May following a revised 282K
expansion the month prior, while the jobless rate unexpectedly held
steady at an annualized 6.3% amid forecasts for a 6.4% print. Despite
the downtick in unemployment, the EUR/USD climbed back above the 1.3650
region following the release, but the market reaction was short-lived as
the pair ended the day at 1.3640.
Trade Setups in EUR/USD, USD/JPY, AUD/USD for NFPs
Traders lulled into a daze by the low volatility ought
to grab a coffee for this morning - volatility should be back with a
vengeance. Thanks to the holiday-shortened week for the July 4 US
Independence Day, market participants have been gifted with the European
Central Bank rate decision and the release of the US Nonfarm Payrolls
report coming within less than an hour of one another.
Of the two, the ECB rate decision will be the less exciting, given the likelihood that the ECB sits pat after unveiling a plethora of measures last month;
simply not enough time has passed for policymakers to determine if said
measures have proven effective. ECB President Draghi's press
conference, in lieu of substantive action, will carry additional weight.
the June US ADP Employment report showing jobs growth north of +280K
(which only tallies private payrolls, not government jobs), there is a
distinct possibility that the June US NFP figure comes in above +250K.
Considering that the Federal Reserve's tone has started to diverge from
incoming economic data (the Fed is behind the curve, as they say), a
strong June jobs report could be the spark the buck needs to move off of
its lowest levels since October.
EUR/USD Forecast July 4, 2014, Technical Analysis
The EUR/USD pair
fell during the course of the day on Thursday, as the jobs number out
of the United States came out better than originally anticipated, so
this of course grow the value of the US dollar higher against most
currencies. The European Central Bank course has suggested that it was
ready to do whatever it took to keep the market and economy afloat, and
as a result it appears that the ECB could keep monetary policy loose,
and perhaps even add to that loosened monetary policy. However, there is
a significant amount of noise below, so really this market still looks
as if it’s ready to bounce around.
AUD/USD Forecast July 4, 2014, Technical Analysis
The AUD/USD pair fell during the session on Thursday, dropping to the
0.9350 level. That being the case, the market certainly looks like it
could fall from here, but there is a significant amount of support down
at the 0.93 level, meaning that possibly the market continues lower but
only after a significant breakdown. On the other hand, if we get a
supportive candle here, we could start buying as well as the market
could head back towards the 0.95 handle. The market breaking above the
0.95 handle would in fact be very bullish, and would be more of a
buy-and-hold type of situation. However, the last two sessions have been
rather brutal against the Australian dollar, so it’s hard to imagine
that there isn’t something going on here.
Breaking down from here would send this market down to the 0.92
handle, an area that is massively supportive. Because of that, we do
think that there are a couple of possible trades coming up, and we are
somewhat ambivalent about which direction the market goes, and will
simply wait until we get some type of move in one direction or the other
in order to be involved. We believe that either direction will work,
but it’s very likely that we could stay between the 0.92 level on the
bottom, and the 0.95 level on the top for the time being, and possibly
even as long as the summer as the Forex markets could get fairly quiet.
Ultimately, we will have to pay attention to the gold markets as
well, as the correlation is well-known between the two markets. On top
of that, we have to pay attention to the idea of whether or not the
Federal Reserve will be able to taper off of quantitative easing going
forward, which of course should boost the value of the US dollar. On top
of that, it really puts a beating on the value of the Australian
dollar, as it is considered to be a “risky” asset. The markets are at a
bit of an inflection point right now, so we will certainly be watching.
Forex Technical Analysis: EUR/USD (based on fxstreet article)
EUR USD, “Euro vs US Dollar”
Influenced by the news, Euro is forming consolidation channel. We think,
today price may leave its descending channel and continue growing up to
break level of 1.3650 again and then reach level of 1.3700. We remind
you that instrument is forming the third ascending wave with target at
level of 1.3790.
AUD USD, “Australian Dollar vs US Dollar”
Australian Dollar completed its descending wave and broke level of
0.9417. We think, today price may return to level of 0.9417. After
reaching it, we’ll see whether price is going to continue falling down
or growing up. If falling down – it may reach level of 0.9270; if
growing up – reach new high. Later, in our opinion, instrument may
continue moving inside descending trend.