The US dollar closed on Friday with some modest gains following a broadly better than expected jobs report. Data from Labor department showed that payrolls increased 222,000 in the month of June. This was higher than the estimates of 173,000 that was forecast by economists. The unemployment rate inched higher to 4.4%, from 4.3% previously while average earnings remained steady at 2.5% on the year.
The greenback was mixed as the currency posted gains across the board, but the Canadian dollar managed to emerge on the top last Friday. This was followed by the Australian and the Kiwi dollars which posted gains.
Looking ahead, the economic calendar today is light. China’s inflation figures released earlier in the day showed that consumer prices rose 1.5% on the month, missing estimates of 1.6% increase. China’s producer prices index was also steady, rising 5.5%, same as the previous month.
The German trade balance figures and the Eurozone Sentix investor confidence will be the other data points that will be released later today.
EURUSD intraday analysis
EURUSD (1.1402): The EURUSD attempted to rally back to the $1.1400 handle last week. The positive gains on Thursday were partly erased by Friday’s declines as EURUSD closed at 1.1403. In the short term, price action is likely to trade within a range ahead of key events this week that includes the semi-annual testimony to Congress by Fed Chair, Janet Yellen. The lower high formed in EURUSD on the 4-hour chart suggests that price action could be biased lower. Support is seen at 1.1357 followed by 1.1300. A breakdown below this level could see the common currency post further declines. However, if support is established at 1.1357 or 1.1300, then expect further gains with the currency pair likely to remain consolidating above this level.
GBPUSD intraday analysis
GBPUSD (1.2893): The British pound posted strong declines on Friday after price reversed near the resistance level of 1.2975 as expected. The declines came as the UK’s industrial and manufacturing production data was weaker than expected. Industrial output fell 0.1% while manufacturing production declined 0.2% on the month. The GBPUSD fell to a 7-day low, closing on Friday at 1.2893. Price action is currently looking to retrace some of those declines but resistance at 1.2900 could likely cap the retracement. This will confirm a decline in GBPUSD towards 1.2800 where support is very likely to be tested.
USDJPY intraday analysis
USDJPY (114.14): The USDJPY continues its ascent with prices now seen trading near the 114.00 handle. The strong gains have managed to push USDJPY closed to testing the May 10th highs of 114.37. Establishing resistance here could see a short-term decline back to the lower support at 112.00. However, a breakout above 114.37 could keep the bullish momentum going. In the near term, watch for support at 113.36 which has already witnessed some strong consolidation.
