Daily Forex Market Preview, 02/02/2018
The U.S. dollar continued to remain weak a day after the FOMC meeting saw interest rates being unchanged. Despite a slightly hawkish Fed statement, the dollar remained weaker especially against the euro currency.
Data from the Eurozone showed that manufacturing sector started the year on a firm footing. Eurozone’s manufacturing PMI was seen rising to 59.6 as expected. In the UK, the manufacturing PMI was slightly weaker with the index at 55.3 which missed estimates of 56.5 and down from December’s 56.2.
In the U.S. the ISM’s manufacturing PMI showed another strong month with the index beating expectations and rising to 59.1 This was however weaker than December’s gain of 59.7.
Looking ahead, the payrolls report for the month of January will be released today which will be major event risk for the currency markets. The U.S. unemployment rate is expected to remain steady at 4.1% while the number of jobs being added during the month is expected to rise 181k, up from December’s 141k. Wage growth is forecast to rise 0.2%, slightly slower than December’s increase of 0.3%.
NZDUSD intra-day analysis
NZDUSD (0.7364): The New Zealand dollar has managed to stay above the 0.7333 level of support but the failure to post fresh highs could signal a near term decline. However, for this to be validated, the Kiwi dollar will need to break down below the support level. To the downside, the first target is seen at 0.7160 provided the support level gives way. Alternately, in the event that the support holds, we could expect to see further gains coming but only if the NZDUSD currency pair can manage to break to fresh highs.
