The US dollar rose slightly in the overnight session as investors waited for the official jobs numbers from the Labor Department. Investors expect the data to show that the economy created more than 160k jobs in August. This will be slightly lower than the previous month’s 164k jobs. Yesterday, data from ADP showed that the economy added 194k jobs in the month. The unemployment rate is expected to remain at 3.7% while the private nonfarm payrolls are expected to rise by 150k. Average hourly earnings are expected to rise by 3.1%, which will be slightly lower than the previous 3.2%. Better-than-expected jobs numbers could lead to a more hawkish Federal Reserve.
The Japanese yen declined after weak data from the country. In July, the country’s household spending declined to 0.8% from the previous 2.7%. Investors were expecting for the spending to increase by 0.9%. Overall wage income for employees declined by -0.3% after rising by 0.4% in the previous month. The foreign reserves rose from $1.36 trillion to slightly above $1.33 trillion. While the Japanese economy is relatively strong, inflation and consumption have been significantly lower. This is partly because of the aging population and the fact that Japanese spend more time working than most people in developed countries.
Later today, investors will receive the German industrial production data, which is expected to rise by just 0.4% after declining by -1.5% in June. From the UK, investors will receive the house price index, which is expected to rise by 3.4%, which will be slightly lower than the expected 4.1%. From the European Union, investors will receive the second reading of Q2 GDP data. The numbers are expected to show that the economy expanded by 1.1%, which is slightly lower than the previous 1.2%. From Canada, they will receive the Ivey PMI data, which is expected to increase to 55.2 from the previous 54.2. Later on, they will listen to a speech by Jerome Powell.
EUR/USD
The EUR/USD pair declined in the Asian session ahead of employment numbers from the US. The pair is trading at 1.1033, which is lower than yesterday’s high of 1.1083. On the four-hour chart, this price is slightly below the 23.6% Fibonacci Retracement level. It is also slightly lower than the upper line of the Bollinger Bands. The pair will likely remain in a holding pattern ahead of the official NFP data.
GBP/USD
The GBP/USD pair rose as Brexit confusion continued. The pair is trading at 1.2325, which is much higher than Friday’s low of 1.1956. This price is above the 14-day and 28-day moving averages and slightly lower than the 50% Fibonacci Retracement level. The RSI has moved to the overbought level of 70. The pair will likely halt the upward trend, retest the 38.2% Fibonacci level of 1.2270, and then resume the upward trend.
USD/JPY
The USD/JPY pair rose after relatively weak data from Japan. The pair is now trading at 107.05, which is slightly above the 50% Fibonacci Retracement level on the four-hour chart. The price is along the upper line of the Bollinger Bands while the RSI has reached the overbought level. As with the other currency majors, there is a likelihood that they will hold-on at the current levels as traders wait for NFP data.
