Currencies fall against the dollar after the positive economic data

Currencies fall against the dollar after the positive economic data. The euro is up to the level of 1.1463 and traders waiting for the most important event NFP tomorrow

Currencies fall against the dollar after the positive economic data

dollar usd

The euro recovered in the European session yesterday obliterating five days of consecutive losses as reports that Italy expects to reduce its budget deficit after next year eased concerns over the prospect of a wider deficit that had rattled markets. The euro made a new low in the Asian session today reaching 1.1462

Italian newspapers reported that Italy’s populist government will reduce its budget deficit targets for 2020 and 2021 to 2.2% and 2% respectively and stick with its plan for 2.4% for 2019. The government had originally said it would plan to run a deficit of 2.4% over the next three years which would have breached European Union fiscal rules, spooking markets and prompting criticism from the European Commission.

Finance Minister Giovanni Tria has noted that he would strive to achieve a figure ranging from 1.6-2%. The former government had agreed with the European Commission that the deficit would shrink to 0.8% in 2019 and 0% in 2020, before recording a surplus of 0.2% in 2021.

Outlook:

The employment numbers for September from ADP was better than expected showing 230k and it was expected 187k and that is higher than the 167K people who were employed in the previous month.

The ISM Non-Manufacturing PMI was better than expected also with 61.6 and the expectation was 58.0. These economics figures give a push to the dollar against currencies.

Gold prices advanced higher after gaining over 1% in the prior session on worries over Italian finances.EU officials expressed concerns about Italy’s financial budget plan and fears of a widening budget deficit drove up safe-haven demand.

In the meantime, senior Italian lawmaker Claudio Borghi said that the majority of the country’s problems would be resolved if it readopted a national currency. Late, Borghi made everything clear by his remarks that Italy’s government has no intention of leaving the euro. Prime Minister Giuseppe Conte also said the country is totally committed to the euro and that any comments that suggest a single currency are merely individual opinions.

The strong rally in the commodity doesn’t mean that the trend is ready to turn higher, with long terms gains likely to be capped by the expectations of rising U.S. interest rates.

Gold prices are trading modestly down during the early US sessions following the release of US economic report that boosted the US equities, while there is less risk aversion in the marketplace.

The just-released U.S. ADP national employment report for September showed a gain of 230,000. Forecasters were expected a rise of 185,000 jobs. Gold prices down-ticked modestly following the report, while U.S. stock indexes up-ticked. This report comes ahead of the more important Labor Department Employment Situation Report for September on Friday morning. The non-farm payrolls number is expected to come in up 180,000.

Trader’s View:

EURUSD: EUR/USD recovers in the European session after hitting 1.1505 and formed a temporary low there. The euro came back down to 1.1463 as a low for yesterday after the positive ADP national employment report. The immediate resistance is located at 1.1530 followed by 1.1650. Immediate support can be found at 1.1390 followed by 1.1320. Looking forward to trading in a possible range today from 1.1420-1.1520

EUR/USD

GBPUSD: Intraday bias in GBP/USD remains on the downside targeting 1.2785 support. The immediate resistance for today is 1.3040 followed by 1.3105. Immediate support can be found at 1.2920 as we mentioned yesterday followed by 1.2860. Look for a possible trading range today from 1.2980-1.2860.

GBP/USD

USDCAD: A temporary low is formed at 1.2780, after hitting lower channel support. USD CAD recovered to 12882 due to the positive economic data for the U.S.The immediate support is at 1.2795 followed by 1.2780 then 1.2710. Immediate resistance can be found at 1.2910 followed by 1.3050.

USD/CAD

USDCHF: USD/CHF edged higher to 0.9924 after U.S data. Immediate support at 0.9800 with next support at 0.9660. The immediate resistance is at 0.9960 followed by 1.0015.

USD/CHF

USDJPY: USD/JPY broke 114.06 important resistance and reached 114.53 temporary top and intraday bias remains neutral. The immediate resistance is at 114.60 followed by 115.00. Immediate support can be found at 113.70 followed by 112.85.

USD/JPY

 

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***Information contained in this newsletter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making but merely provides information from the market for its clients as additional information is made available as per the events occurring in the financial markets.

 

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