Daily Forex Market Preview, 05/02/2018
The U.S. dollar managed to close on Friday with some gains, led by a better than expected payrolls report. Data showed that as the U.S. unemployment rate held steady at 4.1% for the fourth consecutive month, wage growth was better than expected. Previous month’s revisions to wage growth put the annual gain to 2.9%.
Looking ahead, the economic calendar today will see the release of the UK’s services PMI data. Forecast shows that activity in the sector remained stable, easing to 54.1 for January which is down from 54.2 in December. Data from the U.S. will see the release of the ISM’s non-manufacturing PMI data.
The median estimates point to a modest increase to 56.5 for January, up from December’s 55.9. Markit’s services PMI data will also be released for the U.S. Later in the day, ECB President Mario Draghi is expected to speak.
EURUSD intra-day analysis
EURUSD (1.2458): The EURUSD closed on Friday with some losses although price remained near the recent highs. As a result, price action closed with an inside bar that could indicate a potential breakout from last Thursday’s range. The bias remains to the downside as the potentially invalidated bullish flag pattern indicates a downside move. Watch for EURUSD to break down below 1.2398 to validate this view. This could potentially keep the common currency to extend the declines as price action is expected to correct towards the 1.2281 support level that is seen initially. To the upside, in case price manages to rebound off the 1.2398 level, we could expect to see the upside momentum taking shape. But EURUSD will need to post a convincing close above 1.2498 to validate the upside bias.