Trading plan for 06/07/2017:
Yesterday's FOMC Meeting Minutes did not have much impact on the US Dollar as the volatility did not exceed 0.15%. EUR/USD is at 1.1340, USD/JPY at 113.10, GBP/USD at 1.2940. Crude oil is trying to erase part of the 4.0% decrease and has already grown around 0.7 percent. On the market of precious metals, there is no clear trend, with Silver falling 0.25%. One ounce of Gold costs $1,226.
On Thursday 6th of July, the event calendar will get busy especially during the US trading session. The data released during this time will contain ADP Non-Farm Employment Change, Trade Balance, Unemployment and Continuing Claims, and ISM Non-Manufacturing PMI. Moreover, Canada will present its Trade Balance and Building Permits.
EUR/USD analysis for 06/07/2017:
The ADP Non-Farm Employment Change is scheduled for release at 12:15 pm GMT and market participants are expecting a decrease in a number of newly employed people in the USA from 253k to 184k. The job market in the US is in a healthy condition with the unemployment rate at the level of 4.3%. Today's ADP data might support this view again if the data beats expectations. It is highly possible as since the beginning of the year only the January data has been worse than expected, all other data has at least beaten expectations.
The other important data that might have a big impact on the EUR/USD pair is ISM Non-Manufacturing PMI release at 04:00 pm GMT. Market participants expect the index to edge down to 56.6 points from 56.9 points. Economic activity in the non-manufacturing sector grew in May for the 89th consecutive month, so the majority of respondents' comments continue to indicate optimism about business conditions and the overall economy. The sector continues to reflect strength, buoyed by the strong rate of growth in the Employment Index.
Both ADP employment estimate and ISM employment index are both interconnected and both performing strongly in the recent months. If both of them will beat the consensus today, then the NFP-Payrolls tomorrow might as well be better than expected and that will make the US Dollar to appreciate across the board.
Let's now take a look at the EUR/USD technical picture on the H1 time frame. The market is still moving inside of the channel.The price bounced on the 38%Fibo, but the demand side did not have the strength to create a bigger rally so far. This means that the downward correction is unlikely to end yet and it is expected to descend to 1.1280 where 50%Fibo retracement is, the overbalance zone is and highs from 2-7 and 14 June (will now act as supports). On the bigger time frame, the continuation of the upward trend continues. The key resistance is at the level of 1.1445, which is a swing high of June 30. Their breakthrough will open the way to the level of 1.1600, or swing highs from April last year.
Market Snapshot: AUD/USD bounced from support
The price of AUD/USD declined from the top at the level of 0.7711 in five impulsive waves and bounced from technical support at the level of 0.7575. A further upward move might be expected as the market conditions are oversold and there is a visible bullish divergence between the price ant the momentum indicator. The projected target for the corrective cycle is the technical resistance at the level of 0.7635.
Market Snapshot: USD/CAD broke below an important support
The price of USD/CAD is trading below an important technical support on the daily time frame. The market conditions are oversold, so the price tried to rally higher, but it was capped at the level of 1.3015 and then reversed. Nevertheless, further rally attempts are still on the table as long as the technical support at the level of 1.2911 is not violated.
