It’s NFP Friday, people!
Here’s what I’m watching on EUR/USD ahead of this highly-anticipated market event.
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/CHF’s uptrend ahead of the BOE decision. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Challenger job cuts down by 8.2% y/y in July vs. previous 25.2% increase, as employers announce lowest level of job cuts in 11 months
U.S. initial jobless claims at 227K vs. 226K forecast, 221K previous
U.S. July ISM services PMI fell from 53.9 to 52.7 vs. 53.1 forecast to reflect slower pace of industry growth, jobs component down from 53.1 to 50.7
U.S. factory orders accelerated from 0.4% m/m uptick to 2.3% gain in June vs. 2.0% forecast
RBA Statement on Monetary Policy highlighted slowdown in inflationary pressures during June quarter but says rates may need to go higher
Chinese state authorities state that small firms and investors face difficulties but that economy will improve in H2
Price Action News
After tossing and turning on risk sentiment shifts in the previous trading day, Aussie pairs were mostly higher in today’s Asian trading session thanks to expectations of more stimulus from the PBoC and a relatively hawkish RBA Statement on Monetary Policy.
Although the RBA mentioned that inflation has slowed in the previous quarter, policymakers noted that rates may still need to be higher and that they actually considered hiking during their August statement.
AUD is chalking up its largest gains against the Canadian dollar and U.S. dollar, as these currencies are likely bracing for their upcoming jobs reports.
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
Anyone looking to trade the NFP?
EUR/USD is presenting both bullish and bearish setups on the 15-min time frame today, so there could be opportunities to make pips depending on how the actual figures turn out.
The pair has formed lower highs connected by a falling trend line that’s been holding so far this month, and it looks like the resistance is holding so far.
If dollar bulls come out to play, price could gain traction on its downtrend and go for a test of the previous day lows near S1 (1.0920) or even make fresh ones at S2 (1.0890).
On the other hand, a dollar selloff could allow the area of interest at the pivot point (1.0940) to hold and push EUR/USD above the trend line resistance.
In that case, the pair could test the next ceiling at R1 (1.0970) or attempt to extend its rally to R2 (1.0990) which is near the 1.1000 major psychological mark.
Better watch this one closely, fellas!