US unemployment claims were slightly higher than analyst consensus predicted (840K vs. 820K expected). Traders were selling USD and buying EURUSD and gold among others (e.g. AUDUSD, equities and oil) as they still remember the US Federal Reserve saying recently that they will not raise interest rates until the economy is at full employment and the inflation rate is at two percent and looks to exceed this level, the buying that started. Now the question is: is the dollar weakness going to continue? At the time of writing this the USD is gaining some ground: gold is losing momentum at resistance we highlighted in yesterday’s analysis and AUD has also some signs of weakness inside our resistance area. Today’s most important risk events come from Canada as employment change (150K expected) and unemployment rate (9.8% expected) are due today. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

EURUSD spiked below the channel low in the 4h chart but was met with buying as the US unemployment claims gave a reminder of the harsh reality on the ground and the consequent Fed policy of keeping rates low until the situation has returned to normal. We now have a higher low and if the 1.1781 resistance is taken out it’s likely that the price moves to the next resistance area at 1.1803 – 1.1817. A failure to do so would mean a retest of 1.1732 would be likely. To take advantage of our analysis and ultra-low trading fees, register for an account and deposit here.

AUDUSD is losing momentum at the 50% resistance area. If this continues and the pair fails to stay above the descending trend line, a move to 0.7146 support could be in the cards. Alternatively, a move to the next resistance area (0.7208 – 0.7220) could take place. That’s where we have the highs from the recent double top formation and another descending trendline together with 61.8% Fibonacci retracement.

Gold is losing momentum at the resistance area we highlighted yesterday. The next intraday support can be found at 1894 – 1898 range. If this area is violated then the next support level can be found at yesterday’s low at 1881.80.

GBPUSD continues to trade inside the bullish price channel and created a higher low yesterday. This is a positive indication and suggests continued pressure to move the pair through the resistance above. The next hurdle to overcome is yesterday’s high at 1.2970 and after that, we have a resistance zone from 1.2984 – 1.3000 (38.2% retracement to Tuesday’s high). If the pair fails to stay in the rising price channel, a move to 1.2780 to 1.1815 range would be likely. 

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Recent macroeconomic data releases

  • Canada Manufacturing PMI, 56
  • US ISM Manufacturing PMI, 55.4, 56 expected
  • US Average Hourly Earnings, 0.1%, 0.5% expected
  • US Non-Farm Employment Change, 661K, 900K expected
  • US Unemployment rate, 7.9%, 8.2% expected
  • Australia NAB Business Confidence, -4, -8 previous
  • EU Retail Sales,4.4%, 2.4% expected
  • US ISM Non-Manufacturing PMI, 57.8, 56.3 expected
  • Australian Cash Rate, 0.25%, 0.25% expected
  • Canadian Trade Balance, -2.4B, -2.1B expected
  • FOMC Meeting Minutes
  • US Unemployment Claims, 840K, 820K expected

Macroeconomic data releases today

  • Canada Employment Change, 150K expected
  • Canada Unemployment Rate, 9.8% expected.

You may access the times and dates in the economic calendar here.

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Janne Muta
Chief Market Analyst
TIOmarkets.com

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Janne Muta
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