Trading plan for 04/08/2017:
The quiet overnight session might indicate investors are refraining from entering positions before today's US labor market data. The strongest are commodity currencies: AUD is up 0.13% and CAD is up 0.09%. At the other end of the table, the NZD declines 0.09%. Crude Oil is down about 0.2% under the line at $48.90.
On Friday 4th of August, the event calendar is busy with important economic releases only during the US session. The Canada will release Unemployment Rate, Employment Change, Participation Rate, Trade Balance and Ivey Purchasing Managers Index data. The US will provide Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings, Participation Rate and Trade balance data.
EUR/USD analysis for 04/08/2017:
The set of data from the US job market in form of Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings, Participation Rate data is scheduled for release at 12:30 pm GMT. The market participants expect the Unemployment Rate to decrease from 4.4% to 4.3% (which was last seen in May and is the lowest rate during the current economic recovery), NFP Payrolls to decrease from 221k to 181k, Average Hourly Earnings should increase on monthly basis from 0.2% to 0.3%. The most important data are Average Hourly Earnings as the headline NFP number is not grabbing that much attention of the market participants. The reason behind this is that despite the otherwise strong last NFP report, wages did not increase much faster. Wages growth at 2.5% is still higher than the average 2% seen in 2012-15, but in current economic conditions, this is not that great, mainly due to the fact, that the inflation rate is also bit higher. Stronger than expected wages or NFP figure will likely cause some kind of relief rally for the US Dollar across the board.
Let's now take a look at the EUR/USD technical picture at the H4 timeframe. There are two scenarios possible after the news is released. If wages will be better than expected 0.3% then a profit taking and spike down will occur on the EUR/USD pair as the current market conditions are highly overbought. However, if wages are worse than expected, there is a chance that the round number of 1.2000 will be tested, especially if any previous data will be revised down.
Market Snapshot: USD/JPY test the support again
The price of Gold had bounced from the Fibo support at the level of 1,260 and now is trading just below the 78%Fibo at the level of 1,275 as the traders await the US job market report. Neither stochastic indicator, nor momentum indicator is not moving below their fifty levels, so any worse than expected data from the US will likely trigger another spike up towards the technical resistance at the level of 1,280.
Market Snapshot: Gold bounces from 61% Fibo support
The price of Gold had bounced from the Fibo support at the level of 1,260 and now is trading just below the 78%Fibo at the level of 1,275 as the traders await the US job market report. Neither stochastic indicator, nor momentum indicator is not moving below their fifty levels, so any worse than expected data from the US will likely trigger another spike up towards the technical resistance at the level of 1,280.
