The US dollar strengthened today after the release of a strong report from the non-farm payrolls in America that in July increased by 209,000 against the expected 189,000. Positive news from the labor market increases the probability of a rate hike by the Fed during this year and that in turn may lead to growth of the greenback. The unemployment rate in the US declined by 0.1% to 4.3% and the average hourly earnings in the US increased by 0.3% in line with the expected figure.
The common currency received modest support today from news on German factory orders which grew by 1.0% in July. The euro was further buoyed from the increase in Italian retail sales by 0.6% for the previous month which was 0.5% better than the forecast.
The Canadian dollar received a boost from unemployment statistics released today which showed the jobless rate fall by 0.2% in July to 6.3%. This positive was offset by the better than expected figures from the US and weak trade balance data in Canada, according to which the trade deficit was 3.6 billion versus the forecasted 1.3 billion.
The AUD/USD fell today following the Reserve Bank of Australia reducing its forecast for GDP growth to 2% from 3% for 2017. Previous forecasts were for 2.5% to 3% economic expansion. The aussie came under even more pressure from the commodity markets which are seeing a correction following a strong rally. Later today Baker Hughes will release its report on drilling activity in the US and if we see a decline in the price of oil, then the AUD may continue to fall.
EUR/USD
After some consolidation below the resistance level of 1.1900, the EUR/USD price started to decline and may reach the lower limit of the local rising channel and support at 1.1800. Breaking through those levels may become the reason for the price to fall to 1.1700 and 1.1620. In case of growth resuming, the first target will be at 1.1900.
USD/CAD
The USD/CAD price experienced a rise in volatility after labor market releases in both the US and Canada. The price is confidently growing after a consolidation within a narrow range. Overcoming 1.2670 may become a trigger for further price increases to 1.2800 and higher. A downward correction is likely to be limited by the strong support line at 1.2550.
AUD/USD
The AUD/USD quotes have fixed below the lower limit of the local rising channel and breaking the local minimum near 0.7915 may become a confirmation for the sell signal with the stop above 0.8000 and potential targets at 0.7800 and 0.7740. We do not rule out a rebound due to the RSI on the 15-minute chart being in the oversold zone.
