The US dollar fell yesterday after nearly four straight sessions of the gains. The declines came as the ADP private payrolls rose less than expected. While economists were expecting a headline print of 184k, ADP/Moody’s data showed that private payrolls rose just 158k. The jobs numbers for May were also revised down to 230k. Later in the day, the ISM non-manufacturing index rose to 57.4, beating estimates of 56.5 and up from May’s 56.9. But the data couldn’t help the greenback to recover.
Looking ahead, the US nonfarm payrolls data will be coming out later today. Expectations are for a headline jobs print of 175k, while the average earnings are expected to rise 0.3% on the month. The US unemployment rate is expected to remain steady at 4.3%. Canada will also be releasing the jobs report. Canadian unemployment rate is expected to stay put at 6.6%, unchanged from the previous month, while the Canadian economy is expected to add 11.4k jobs during June.
The BoE Governor, Mark Carney will also be speaking later in the day, followed by Canada Ivey PMI data.
EURUSD intraday analysis
EURUSD (1.1419): The EURUSD recovered sharply to regain the $1.1400 handle. The gains came as the ECB policy meeting minutes showed that members of the governing council were considering to remove the pledge for further easing. So far, the euro is reacting positively to any hints of hawkish messages from the ECB. The rally to 1.1400, however, comes with risk. A possibility of a lower high forming here could signal a longer-term decline back to 1.1300 and potentially to 1.1129. This bearish bias could however change should the EURUSD manage to hold at the current levels and push past the previous highs of 1.14450.
GBPUSD intraday analysis
GBPUSD (1.2972): The British pound continued to edge higher with price action seen testing the resistance level at 1.2975. If the resistance level holds out here, we could expect a reversal to the downside. GBPUSD could be potentially testing the support at 1.2800 which previously served as resistance. On the 4-hour chart, the current rally to 1.2875 signals a lower high in the making. It is best to wait for a reversal pattern here before considering the correction towards 1.2800. The BoE Governor Carney’s speech today could add some volatility, although the broader expectations are that the comments could be hawkish
USDJPY intraday analysis
USDJPY (113.65): The USDJPY is seen attempting to break above the 113.36 handle. This level marks the completion of the bullish flag pattern. Price action could be seen consolidating at the current levels with the risk to the downside. Failure to post a convincing close above 113.36 on a daily basis could signal a correction towards 112.00 – 111.72 level of support. On the daily chart, price action has already showed a few sessions closing nearly flat which suggests that the upside momentum could be fading. Today’s nonfarm payrolls report could be crucial as this could help push the currency pair higher. Watch for an intraday break below 113.36 to confirm the correction to 112.00.
