Yesterday’s Trading:
The euro/dollar was trading by the LB on Thursday, waiting for the key NFP report to come out. The US stats published yesterday offered an insignificant amount of support of the dollar. According to the report, the number of initial unemployment benefit applications for the week ending 1st August increased by 3,000 to 270,000 (forecasted: 273,000, previous: 267,000)
Main news of the day:
- At 09:00 EET, Germany’s June manufacturing volume and July balance of trade is out;
- At 09:30 EET, the Bank of Japan is holding a press conference;
- At 11:30 EET, UK June balance of trade figures are being published;
- At 15:30 EET, the US is publishing its unemployment level, its NFP and July figures for number of employed;
- At 15:30 EET, Canada is giving an indication of the number of construction permits issued in June, as well as July numbers for changes for number of employed and its unemployment level;
- At 17:00 EET, Canada is releasing its July manager’s business activity index from Ivey.
Market Expectations:
Market participants are waiting for US labor market data to come out. They are counting on the data shedding light on the situation concerning US interest rates and they are hoping that the data will indicate which way the dollar is going to go for the month. Canadian stats are also out with the NFP, so volatility at 15:30 EET will be high. It will be similar stuff for the pound after the Bank of England has convened.
Technical Analysis:
- Intraday target: maximum: n/a, minimum: n/a, close: n/a;
- Intraday volatility for last 10 weeks: 130 points (4 figures).
Hourly
My forecast runs up to 15:30 EET. I’ve no idea how the NFP is going to come out and I’m not going to bother guessing. Although I will say one thing, it’s worth having a look at the NFP data. The ADP index is Wednesday’s driver and the NFP is Friday’s. Between them there is no correlation.
Daily
In yesterday’s report I wrote about how with the current price pattern (1.0807 minimum and 1.0847 maximum), the risk of a return to 1.1057 has increased. Any eurobull success will be directly linked to Friday’s NFP data. If the report comes out below 185,000, we will see a sharp fall of the dollar throughout the market. If it meets expectations or comes out better, we’re looking at the rate moving to 1.0800/1.0750. Now to the Weekly.
Weekly
Today is an important day for the dollar and the euro. The US Fed is keeping an eye on the labor market data and will be analyzing all the indicators in order to set a date for an interest rate rise. Here there’ll be a lower or trend line break.
