Forex Analysis: EUR/USD

Forex Analysis EUR/USD | August 3 2017 | sgtmarkets.com | SGT Markets Forex Broker and CFD

U.S. ADP Nonfarm Employment Change again worse than expected. Ahead of U.S. Nonfarm Payrolls, whether there will be a tough downside correction on EUR/USD or another bullish breakout is linked to the next news outcome.

Spanish Unemployment Change worse than expected. German Manufacturing PMI and German Unemployment Change on the downbeat too.

Deepening U.S. political uncertainty keeps the greenback on the defensive because the Trump administration remains under the cloud of a probe into alleged Russian meddling in the U.S. 2016 presidential election. Still, we think USD is oversold.

U.S. Conference Board Consumer Confidence better than expected, both Manufacturing and Services PMI in the U.S.A. were better than expected as well.

On the other hand, ECB remarks appeared to signal a shift towards tapering monetary stimulus, but President Draghi reiterated that any changes to the stimulus program will be “gradual” and “cautious.”

As we wrote previously, 1.1856 is a strong Resistance and it is working. We expect first a re-test back to 0.1756, then a correction down to 1.1655. In the case of bad news from the U.S., we can see EUR/USD conquering 1.19 area in an overshooting bullish enthusiasm.

Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:

Weekly Trend: Overbought
1st Resistance: 1.1756
2nd Resistance: 1.1856
1st Support: 1.1655
2nd Support: 1.1590

 

EUR

Recent Facts:

27th of April, ECB Interest Rate decision + ECB Press Conference
Unchanged, eyes on next Inflation data

28th of April, CPI (Preliminary)
Higher than Expected

2nd of May, German Manufacturing PMI
As Expected

3rd of May, German Unemployment Change + Eurozone GDP (Preliminary)
German Unemployment Change Better than Expected (for the 5th time in a row)
Eurozone GDP (Preliminary) As Expected

7th of May, French Elections
Centrist pro-EU Macron Won French Elections

12th of May, German GDP (Preliminary release)
As Expected

16th of May, Eurozone GDP (Preliminary release) + Trade Balance + ZEW Economic Sentiment
Better than Expected

17th of May, Eurozone CPI
As Expected

23rd of May, German Manufacturing PMI
Better than Expected

30th of May, German CPI (Preliminary release)
Worse than Expected

31st of May, German Unemployment Change + Eurozone CPI (Preliminary)
German Unemployment Change better than Expected (for the 8th time in a row), Eurozone CPI Worse than Expected

1st of June, German Manufacturing PMI
Slightly Better than Expected

8th of June, GDP, Interest Rate Decision + ECB Press Conference
GDP Better than Expected, ECB moving closer to an exit from its stimulus program

13th of June, French Non-Farm Payrolls
Better than Expected

13th of June, German Zew Economic Sentiment
Worse than Expected

23rd of June,
German Manufacturing PMI Better than Expected
German Services PMI Worse than Expected
Eurozone Manufacturing PMI Better than Expected
Eurozone Services PMI Worse than Expected

26th of June, German Ifo Business Climate
Better than Expected

29th of June, German CPI
Better than Expected

30th of June, German Unemployment Change + Eurozone CPI
German Unemployment Change Better than Expected, Eurozone CPI higher than Expected

3rd of July, German Manufacturing PMI
Better than Expected

5th of July, French Services PMI + German Services PMI + Eurozone Retail Sales
Better than Expected

18th of July, German ZEW Economic Sentiment
Worse than Expected

24th of July, German Manufacturing PMI + Eurozone Manufacturing PMI + Eurozone Services PMI
Worse than Expected

28th of July, German CPI
Better than Expected

31st of July, Eurozone CPI (Preliminary) + Unemployment Rate
Eurozone CPI (Preliminary) as Expected, Unemployment Rate Better than Expected

1st of August, German Manufacturing PMI + Unemployment Change
Worse than Expected

 

USD

Recent Facts:

13th of June, Producer Price Index
Core PPI (ex food and energy) Better than Expected

14th of June, CPI + Retail Sales
Worse than Expected

14th of June, FOMC Interest Rates Decision + Statement
Interest Rate hike as Expected (to 1.25%)

23rd of June, Manufacturing PMI
Worse than Expected

26th of June, Durable Goods Orders
Worse than Expected

28th of June, Pending Home Sales
Worse than Expected

29th of June, U.S. GDP + U.S. Job Market
GDP Better than Expected, Job claims slightly worse than expected

3rd of July, ISM Manufacturing PMI
Better than Expected

5th of July, FOMC Minute Meeting
U.S. Federal Reserve members insisted that expectations are that inflation will rise to 2% target in 2019

6th of July, ADP Nonfarm Employment Change + ISM Non-Manufacturing PMI
ADP Nonfarm Worse than Expected, ISM Non-Manufacturing Better than Expected

7th of July, Nonfarm Payrolls + Unemployment Change
Nonfarm Payrolls Better than Expected, Unemployment Change Worse than Expected

13th of July, PPI
Better than Expected

14th of July, U.S. Core Retail + U.S. CPI
Worse than Expected

20th of July, Philadelphia Fed Manufacturing Index
Worse than Expected

25th of July, Conference Board Consumer Confidence
Better than Expected

27th of July, Core Durable Goods Orders
Worse than Expected

28th of July, U.S. GDP (Preliminary release)
As Expected

1st of August, ISM Manufacturing PMI
Slightly Worse than Expected

2nd of August, ADP Nonfarm Employment Change
Worse than Expected

Eyes on today release: ISM Non-Manufacturing PMI

 

Forex Analysis: GBP/USD

Forex Analysis GBP/USD | August 3 2017 | sgtmarkets.com | SGT Markets Forex Broker and CFD

UK Construction PMI dropped at the lowest since October 2016. This means that, in the case of disappointing Services PMI from today release, GBP will start an important correction below 1.30 area. Important news upcoming from the U.S. too (job market).

GBP gained amid speculations bets on optimistic soft-BREXIT resolutions. But there’s no doubt that U.K. growth is slowing with the details of the GDP report showing weakness in the manufacturing and construction sectors. Growth is expected to ease further in the coming months as BREXIT gets underway. In our opinion, GBP now results in overbought setup.

British Trade Minister said that it is perfectly reasonable that people want to have some transitional period until the final agreement with UE will be reached. “But we can’t have a perpetual transitional period undermining the concept of Brexit itself,” he added.
The agreement between Conservative Party and Democratic Unionist Party is still occupying only the background of the global Sentiment on Pound.

As we wrote, 1.3203 is an ultimate Resistance and we think unlikely to see price overcome that obstacle unless there will be bad data from the U.S. job market. 1.3099 Resistance should be reconfirmed as first downside target. In the case of bad news from the U.S., eyes on 1.33 area.

Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2001:

Weekly Trend: Overbought
1st Resistance: 1.3203
2nd Resistance: 1.3099
1st Support: 1.2978
2nd Support: 1.2830

 

GBP

Recent Facts:

11th of May, UK Manufacturing Production + Trade Balance + BoE Interest Rate Decision
Manufacturing Production + Trade Balance Worse than Expected
The Bank of England made no changes to monetary policy but warned that living standards will fall this year as the headwinds from Brexit mount

16th of May, UK CPI (Inflation data)
Higher than Expected

17th of May, UK Job Market
Worse than Expected

18th of May, Retail Sales
Better than Expected

25th of May, GDP (Preliminary)
Worse than Expected

1st of June, UK Manufacturing PMI
Slightly Better than Expected

2nd of June, Construction PMI
Better than Expected (Highest level since February 2016)

5th of June, UK Services PMI
Worse than Expected

8th of June, UK General Elections
British Prime Minister Theresa May’s Conservative Party lost its parliamentary majority in a general election, throwing the country’s politics into turmoil and potentially disrupting Brexit negotiations.

9th of June, industrial production + manufacturing production
Worse than Expected

13th of June, UK CPI
Higher than Expected

14th of June, UK Job Market
Claimant Count Change Better than Expected, Average Earnings Index Worse than Expected

15th of June, Retail Sales
Retail Sales Worse than Expected,

20th of June, BoE Gov Carney Speech
Carney ruled out imminent rate hikes, warning of weak wage growth and a likely hit to incomes as Britain prepares to leave the European Union.

30th of June, GDP
UK GDP as Expected, with improving Current Account

3rd of July, UK Manufacturing PMI
Worse than Expected

4th of July, Construction PMI
Slightly Worse than Expected

5th of July, Services PMI
Slightly Worse than Expected

7th of July, Manufacturing Production
Worse than Expected

12th of July, UK Job Market
Better than Expected

18th of July, CPI
Worse than Expected

20th of July, UK Retail Sales
Better than Expected

26th of July, UK GDP release (Preliminary)
As Expected

1st of August, Manufacturing PMI
Better than Expected

2nd of August, Construction PMI
Worse than Expected (at the lowest since October 2016)

Eyes on today release: Services PMI

 

USD

Recent Facts:

See above.

 

Forex Analysis: AUD/USD

Forex Analysis AUD/USD | August 3 2017 | sgtmarkets.com | SGT Markets Forex Broker and CFD

Eyes on today RBA Monetary Statement and Australia Retail Sales.

Australia Trade Balance again on the downbeat. U.S. ADP Nonfarm Employment Change worse than expected.

Australia reported building approvals for June jumped 10.9%, far outpacing a 1.5% gain seen month-on-month.

The U.S. Federal Reserve statement noted that interest rates are likely to remain low for “some time”, highlighting that increases in its benchmark rate will depend on incoming economic data.
U.S. Conference Board Consumer Confidence better than expected, both Manufacturing and Services PMI in the U.S.A. were better than expected as well. Last U.S. GDP release pared expectations.

On the other hand, the dollar fell amid expanding investigations into allegations that Russia meddled in the 2016 U.S. presidential election (investors are afraid that would sidetrack the implementation of Trump’s fiscal and economic policies) and after repeated failure of Trumps’s healthcare bill, not able to garner enough votes for replacing Obamacare.

As we wrote previously, 0.8034 is very strong Resistance and it worked pushing price back to 0.7916 again. We confirm that 0.783 area will have to be retested, and this represents our first target.

Our special Fibo Retracements are confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:

Weekly Trend: Overbought
1st Resistance: 0.7916
2nd Resistance: 0.8034
1st Support: 0.7828
2nd Support: 0.7735

 

AUD

Recent Facts:

26th of April, Australia CPI
Lower than Expected

2nd of May, RBA Interest Rate Statement
RBA holds Rates at 1.5%

4th of May, Australia New Home Sales + Trade Balance
Worse than Expected

9th of May, Australia Retail Sales
Worse than Expected

18th of May, Australia Employment Change
Better than Expected

24th of May, Australia Construction Work Done
Worse than Expected

24th of May, Moody’s Credit Rating on China
Moody’s Investors Service downgraded China’s credit rating to A1 from Aa3, changing its outlook to stable from negative

25th of May, OPEC Meeting
OPEC decided to extend production cuts by nine months to March 2018

30th of May, Building Approvals + Private House Approvals
Better than Expected

1st of June, Australia Retail Sales
Better than Expected

6th of June, Reserve Bank Of Australia Interest Rate Decision and Statement
In the last meeting, the Reserve Bank of Australia held Interest Rates at 1.5% as expected, reporting that the current account’s deficit widened

7th of June, Australia GDP
Better than Expected

15th of June, Australia Employment Change
Better than Expected (3rd month in a row)

29th of June, HIA New Home Sales
Better than Expected

4th of July, Retail Sales
Better than Expected

4th of July, Reserve Bank of Australia Interest Rate Decision
RBA holds Rates at 1.5%

6th of July, Australia Trade Balance
Better than Expected

11th of July, Home Loans + NAB Business Confidence
Home Loans Worse than Expected, NAB Business Confidence Better than Expected

12th of July, Westpac Consumer Sentiment
Better than Expected

20th of July, Employment Change + Unemployment Rate
Employment Change Worse than Expected, Unemployment Rate as Expected

25th of July, CPI + RBA Governor Lowe Speech
Worse than Expected

3rd of August, Trade Balance
Worse than Expected

4th of August, RBA Monetary Statement + Australia Retail Sales

 

USD

Recent Facts:

See above.