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Daily FX Brief, Aug 02 – Big Day, Buckle Up for the Nonfarm Payroll?

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On Friday, the popular Nonfarm payrolls report will steal the show at12:30 GMT, two days after the FOMC policy meeting. It’s expected to indicate that the labour market is still a bright spot in the US economy and hence supportive of consumption.

The data, however, are likely to leave the window open for further monetary easing in the year ahead as risks continue to linger on the horizon. In June, new job positions surged by a surprising 224k, surpassing by a wide margin the market’s projection for a 160k increase.

Dollar Index retreated from its two-year high on Thursday, slipping 0.2% on the day to 98.42, as the U.S.-China trade war kicked in a higher gear. Meanwhile, investors will focus on the July nonfarm payroll report due later today (vs. +165,000 jobs and jobless rate steady at 3.6% expected).

Economic Events to Watch Today

EUR/USD – Daily Outlook

The EUR/USD currency pair declined near 1.11 in Asia, due to risk aversion. Today in the early Asian market, the EUR/USD currency pair is presently trading at 1.1075, faced a 0.10% drop on the day, having hit a high level of 1.1097.

The EUR/USD hit the bearish track and faced a decline around 1.11, due to risk aversion in the international markets. Asian equities are presently down, following the overnight declining as of president Trump’s escalation of trade anxieties with China. Besides, the concentrate will move from trade tensions to the United States monthly labour market report later in the data.

The unemployment rate is forecasted to continue constantly at 3.7%. The average hourly earnings are estimated to increase by 3.2% year-on-year in July, after a 3.1% increase in June.

Whereas the increasing trade tensions and a low-forecast United states payrolls data could extend the case for the more rate cut by the Fed soon, these are the reason behind losses in the greenback.



Daily Support and Resistance
S3 1.093
S2 1.0999
S1 1.1041
Pivot Point 1.1069
R1 1.1111
R2 1.1138
R3 1.1207

EUR/USD – Trade Tips

Technical indicators have turned dipped in the red, retaining their downward slopes and with the RSI currently at 27. The mentioned low is the immediate support, en route to the 1.1000 critical figure. Consider staying bearish below 1.1060 to target 1.1000 today.

 

GBP/USD – Daily Outlook

The GBP/USD currency pair found on the defensive track despite declining US yields. During the London opening today, the GPB/USD currency pair still trading at the defensive track due to the decline in the U.S. treasury yields. Moreover, the currency pair rejected at five-day moving average as the United States and China trade concerns.

The GBP/USD currency pair faced bearish track of a five-day moving average at 1.2950 on the early day and was last seen trading at 1.2102, showing 0.17% losses on the early day.

As of writing, the ten-year treasury yields declined approximately twenty- basis points yesterday and present,y trading at 1.88%, the lowest level since Nov 2016.

Meanwhile, the benchmark yields dropped due to raised haven demand for treasures following the United States President Trump escalated the trade anxieties by announcing the United States would impose a new 10% tariff on 300$ Chinese goods which are imported from China because such as, China is not fulfilling their promise which is made during the last trade negotiations at G-20 meeting.

The decline in the US yields, however, did little to increase the buying trend around GBP/USD currency pair.



Daily Support and Resistance
S3 1.194
S2 1.2032
S1 1.2077
Pivot Point 1.2124
R1 1.2169
R2 1.2217
R3 1.2309

GBP/USD – Trade Tips

The GBP/USD pair surged to complete 23.6% retracement at 1.2215 but reversed before completing 38.2% retracement at 1.2275. I will consider staying bearish below 1.2130 to target 1.2075 today. All the best!

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