All Eyes Will Be On February’s US Jobs Reports.
Watch out for the U.S. Non-Farm Payrolls today. It will be announced at 13:30 p.m. (GMT) and the Jobs Report is an important determinant of Fed rate hike in the upcoming decisions.
Last week, The New Fed Chair Jerome Powell had testimony on the Semiannual Monetary Policy Report. He vowed to prevent the economy from overheating while sticking with a plan to gradually raise interest rates. His comments fueled speculation in equity markets over US monetary tightening this year happening faster than expected. Investors have started to forecast four rate hikes this year, compared to the three the Fed currently predicts.
The ADP Nonfarm Employment Change came out better than expected last Wednesday and it rose to 235K.
US Nonfarm Payrolls is expected to 200K jobs created after rising 200K the previous month. Unemployment Rate is expected to ease to 4.0% compared to 4.1% a month ago. Average hourly earnings will be another release to be followed closely at the same time and are expected to be 0.2% lower than 0.3% a previous month.
The Fed is scheduled to hold its next policy meeting on March. 20-21. An upbeat employment report will point to an improving US Economy and support the case for higher interest rates in 2018.
EURUSD: The ECB keeps interest rates unchanged at 0%, as expected yesterday. the EURUSD pulled back to the 1.2314 daily level as a result of Draghi more dovish tone, Draghi said the pledge to expand its quantitative easing program had been added to the bank’s rate statement in 2016 when the situation was very different. He also noted that the ECB maintained its pledge to continue its asset purchase program until September 2018 or beyond, if necessary
If the price stays above 1.2314, on a daily basis, the pullback may be limited and the price may find buyers. At this point, we will face resistance level again at 1.2384. On the other hand, if the price drops below 1.2314, the next support level will stand at 1.2232.
Support: 1.2314 - 1.2232 – 1.2171
Resistance 1.2384 – 1.2465 - 1.2521
GBPUSD: UK Manufacturing Production for January will be announced today. The Data is expected to ease to 0.2% from 0.3% in the preceding month. Any strengthening in the index amid Brexit concerns would be considered positive for the British economy.
The GBPUSD pair showed a downward movement from 1.3880 daily level yesterday. In the event that the fall continues, we will face 1.3745 and 1.3651 as support levels. On the other hand, If the pair rises, we will see 1.3880 as a daily resistance level. However, as long as the price stays below 1.3880, on a daily basis, the rise may be limited.
Support: 1.3745 – 1.3651 – 1.3536
Resistance: 1.3880 – 1.3999 – 1.4130
USDJPY: Bank of Japan Rate Decision was published in Asian Session. The BOJ kept it is yield-curve control settings and asset purchases unchanged.
The USDJPY pair moved up above the 106.46 daily level in the Asian Session. If the price is able to stay above 106.46, on a daily basis, the greenback may gain more value versus the yen and we will follow resistance level at 107.65. Although, if the price drops below 106.46, the next support level will be at 105.04
Support: 106.46 – 105.04 - 103.76
Resistance : 107.65 – 108.78 – 109.35
GOLD: The Gold price dropped below the 1319 key level. In the event that the yellow metal trades below 1319 on a four hourly basis, the pullback may continue and we will watch 1307 as a daily support. Otherwise, if the price moves up above 1319, the key resistance level can be found at 1330.
Support: 1307 – 1291 - 1283
Resistance: 1319 - 1330 - 1352
09 Jul 18 (Mon)