Probably the most burning question in your mind is the following: Why is the EURUSD trading at 1.1860? Well, if we are looking at the macroeconomic data, we can observe: the Non-Farm Employment Change beat expectations by being reported to 252k, the Unemployment Rate fell to 5.6% but the Average Hourly Earnings disappointed with -0.2%. Here are two conclusions to be drawn:
- The market participants would have been expected the average hourly earnings to rise along with the number of people who received a job. This apparently did not happen and this macroeconomic indicator started to get even more attention than the NFP or the unemployment rate. Not to forget the inflation reports which, together with the average hourly earnings, seem to influence the most the evolution of the U.S. dollar.
- There are strong chances that the market participants are getting tired of taking buying positions on USD and are looking for other opportunities. Consider also that the strong appreciation of the U.S. dollar has not such a positive effect on the economy.
Will we see the EURUSD over 1.9000? Or is it more likely to fall to 1.7000? For sure this is the range that may dominate this currency pair for a while, but only the market participants will get to decide which position is the most suitable in the end.
The Australian and the New Zeeland dollar gained ground while the U.S. dollar was falling. Are those only corrections or movements that may question the strength of the downward trend? What we can deduce is the fact that both the Australian and the New Zeeland dollar didn’t finish their depreciation path. Tomorrow, China will publish the Trade Balance, expected to disappoint the market, which could weigh heavily on the two currencies.
The sterling pound puts more distance between it and the 1.5000 area. A set of data about the inflation will be released tomorrow, among which the most important information is the CPI. This could put pressure, at least temporarily, on the pound.
Gold is rapidly moving towards the 1230 dollars per ounce, but it needs a while to stabilize in this area. The appreciation of the precious metal has chances to continue as the participants in the market feel the need to get their investments secured, at least until the market will regain their credibility in the United States and get to stabilize in Europe (on Wednesday The European Court of Justice is due to announce a ruling on the legality of the European Stability Mechanism and Fiscal Compact).
