Yesterday’s Trading:
Wednesday was a volatile one for the euro. Weak ADP saw the euro/dollar rise to 1.0933. Strong ISM saw the euro return to 1.0849. After Europe’s close, the euro recovered to the LB.
The number of July private sector jobs in the US stood at 185,000 (forecasted: 220,000, previous: 237,000).
The July US service sector business activity index was 60.3 (previous: 56.0, forecasted: 56.2).
Main news of the day:
- At 9:00 EET, Germany is publishing June values for factory orders.
- At 11:30 EET, the UK is releasing data on manufacturing production and industrial production.
- 14:00 EET, the Bank of England will make an interest rate announcement and publish its minutes for their meeting.
- At 14:45, Mark Carney will give a speech.
- At 15:30, the US will publish its weekly report on initial unemployment benefit applications.
Market Expectations:
The market managed to carry the pair all the way to Thursday at the same level as Friday’s close. Today the market is waiting to see what the Bank of England is going to say. They will let us know about any interest rate decision, publish the results of the monetary policy committee’s voting (they used to be published two weeks later) and an inflation report. Forty-five minutes later, Mark Carney will give a speech. This is all going to happen before the US payrolls are out.
Technical Analysis:
- Intraday target: maximum: 1.0970 (Europe opening), minimum: 1.0890 (in the States), close: 1.0895;
- Intraday volatility for last 10 weeks: 130 points (4 figures).
Hourly
The euro/dollar is trading by the LB. I’m looking at a growth of the euro to 1.0970 because of the Bank of England meeting, but then it will head back to the LB. If the pound heads up quickly after the meeting, the euro/pound will fall. As a result, the euro/dollar will be under pressure. Due to this, any growth on EUR/USD should be quite reserved. If the pound/dollar breaks the 1.5675 after the Bank of England meeting, you’d do better to abstain from selling euros until Europe closes.
Daily
The sellers couldn’t strengthen below the dotted line (drawn along the close price). Yesterday I wrote that if the euro closes above it, I expect a return of the rate to 1.0930. The Asian maximum is fixed at 1.0933. The current price model has upped the risk for a return to 1.1057. Any eurobull success will depend on the NFP data. Now to the Weekly.
Weekly
The euro/dollar closed with a growth on Wednesday. This isn’t an indicator for the weekly graph, but it means that there are risks the candle will close with a low tail. This is bad news for sellers.
