Forex Trading Library

Forex Afternoon Wrap – 04/06

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US dollar shaky as markets start to consolidate ahead of the Jobs report tomorrow

Key Notes:

  • Australia retail sales m/m 0% vs. 0.3%
  • France unemployment rate 10.3%
  • UK Halifax house price index 3m/y 8.6% vs. 8.5%
  • Greece unemployment rate 25.6% vs. 25.2%
  • BoE Rate, unchanged at 0.5%; Asset purchases, unchanged at 375bn
  • US Challenger job cuts y/y -22.5% from 52.8% previously
  • US Weekly jobless claims ___k vs. 278k
  • US unit labor costs q/q __% vs. 6%
  • Nonfarm productivity y/y __% vs. -3%

Later:

  • Canada Ivey PMI

The US Dollar weakened in the US trading session yesterday and the general theme was brought forth today with the Asian markets. However, the Australian dollar failed to hold on its gains from yesterday’s high near 0.781 as retail sales for the month remained flat falling short of 0.3% rise in expectations. The Australian dollar fell to the lows of 0.77 but managed to see a small bounce which saw the Aussie bounce to 0.7757.

The Kiwi Dollar remained subdued but was supported above the lows near 0.711. The Japanese Yen managed to remain supported above 124 on a modestly firmer Yen. BoJ officials’ comments earlier today pushed back expectations of further stimulus easing. The USDJPY was trading tightly within a range indicating a possible break out in the near term.

The European trading session saw another surge in the EURUSD as the single currency continued to post new gains since yesterday’s ECB’s press conference. EURUSD touched session highs near 1.13575 but failed to break higher, indicating a possible decline in the near term to the daily pivot level of 1.121. There were no major economic data releases from the Eurozone today.

The British Pound managed to gain towards 1.5425 in today’s trading session after the Bank of England left interest rates unchanged. The Cable however failed to break above the major resistance zone near 1.5455 through 1.551 and was seen trending lower which could indicate a possible decline back to the daily pivot level before preparing for another attempt to the upside.

The US trading session saw the release of the weekly jobless claims, which saw 276k new claims, below the market expectations of 278k. Unit labor costs for the quarter rise 6.7% while nonfarm productivity fell -3.1%. The US Dollar Index, which was weaker during the day and fell below support at 95.20 was seen rising back to retest the broken support for resistance. Failure to move above 95.20 will see the US Dollar Index likely to weaken further in the near term towards 94.10 support. For the remainder of the day there are no further economic data releases with the exception of Canada’s Ivey PMI where the market expectations are for a modest drop to 55, after rising to 58.2 a month ago.

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