As was the case with the yesterday’s trading session, the currency market participants have taken a “wait and see” strategy on Friday, which is observed by the sluggish dynamics of trading on FOREX and insignificant change in the stock market (FTSE +0.10%, DAX +0.16%, CAC +0.02%). Namely, everyone is waiting for American nonfarm payrolls data for August (forecast -120k, previous -131k). Traders fear that the data will come out weak, which was exactly the case in the last 3 months. In this regard, we are expecting a drop in the stock market (S&P500 down to 1050-1040) and commodity market (WTI: breaking the 74.50 support level), which can be positive for dollar on FOREX. From the technical analysis perspective a very strong indicator will be the closing of an hour candle on EUR/USD by 15:00 cet.
EUR
During the first half of the day the EUR/USD pair was trading in a narrow range of 1.2810-1.2830. This is explained by the publication of mixed PMI Services data in the European region. In Italy and France index appeared to be better than was forecasted (actual 57.2, forecast 58.5). In Eurozone the same indicator made up 55.9 points, given the forecast of 55.6. The fact that German’s PMI Services appeared to be worse among all the reported countries, indicates that there is not much to expect from euro. The only thing which is supporting the European single currency at the moment is the publication of good retail sales data in Eurozone (actual +0.1% m/m and +1.1% y/y, forecast 0% m/m and 0.7% y/y). Also, a certain support for euro might be provided by the general optimistic sentiment regarding the recovery of the world economy which finds its reflection in American and European stock markets’ advance during almost the whole week.
Following the European session EUR/USD rose from 1.2810 to 1.2845.
GBP
A sluggish dynamics of pound trading can be explained by weak data coming from the British region. This is explained by the publication of PMI Services data in the UK, which made up 51.3 points given the forecast of 52.9. After a small decline the GBP/USD recovered to the level of 1.5405-1.5415.
As was indicated before, a subsequent movement in the GBP/USD pair is timed to the meeting of the Bank of England on September 9.
At the end of the trading session the GBP/USD advanced from 1.5390 to 1.5450.
JPY
A certain pressure on yen, despite the continuing optimism on the European and American stock markets, can be provided by subsequent speculations on the fact that the Bank of Japan will need to resort to currency interventions. There are several publications in the media (Bloomberg, Reuters, CQG) which say that the Japanese officials are probing ground, trying to find out how the US will react to the resumption of currency interventions.
To our mind, the rumors and speculations of this kind, will not manage to stop a subsequent appreciation of yen, resulting in a decline of USD/JPY down to 80, exactly the level when BOJ can start intervening.
Any rise in USD/JPY to 85-86 is advised to use for opening new short positions.
Jevgeni Beloussov, analyst
of company Admiral Markets.
At any use of the analytical material taken from a site of company Admiral Markets, and the secondary publication on any other resources, the rights to intellectual property for a dealing centre «Admiral Markets», the reference to a company site is obligatory.
