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Traders Prepare For Weaker Payrolls – Are They Right?

Dear Traders,

It’s payrolls day and the dollar is clearly tending toward weakness ahead of the first relevant event of the year. Yesterday’s employment data came in mixed with private-sector payroll growth slowing in December while the non-manufacturing ISM index was in line with expectations. Many market participants expect the December employment figures to be weaker, putting the greenback under further selling pressure in the run up to the report. Even if this assumption is correct, wage growth will take center stage in today’s job report. After disappointing November figures average hourly earnings are expected to tick up to 0.3 percent and it is precisely this or a stronger uptick that is needed to put the dollar back in the bullish track. If, however, all key figures of the report disappoint, the greenback will suffer further losses. Let’s wait and see.

The Non-Farm Payrolls report is scheduled for release at 13:30 UTC today.

The euro took a glimpse at the upper side of 1.06 but was not able to hold onto that high level. It will now hinge on the jobs report whether there is still room for further gains toward 1.0650/70. On the downside, traders should keep an eye on the 1.0480-support level. Below 1.0480 we expect the euro to fall back toward the 1.04-mark.

The British pound rose above 1.24 but fell back into its former 1.2350-90-resistance area, which now could prove as a new support for the pound. Below 1.2350 we see a lower bound at around 1.2320. If the pound declines below 1.2270 we expect the bias to shift from bullish to bearish. Above 1.2440, however, we may see a continuation of the upward move, heading for 1.25 and 1.2550. But the price action will depend on the outcome of the payrolls.

We wish you a beautiful and relaxing weekend.

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Draghi delivered – All eyes on U.S. Payrolls now

Dear Traders,

As expected, ECB president Mario Draghi talked down the euro by emphasizing that asset purchases can be adjusted in terms of size and duration if needed. He signaled that European Central Bank officials might expand stimulus if economy weakens further and inflation does not return to the ECB’s goal of 2 percent. The central bank cut its outlook for inflation and growth for each year through 2017. Draghi indicated that inflation rates may drop below zero before accelerating in 2016 and 2017. Until then, “there aren’t special limits to the possibilities that the ECB has in gearing up monetary policy,” he said.

In other words, traders got what they were looking for: A dovish Draghi, who sends the euro on a downhill ride.

Today, the market’s attention is focused on the August Non-Farm Payrolls report. Market participants are looking for a confirmation whether the U.S. economy is strong enough for a September liftoff amid recent turmoil in global markets. The odds for a Federal Reserve rate-hike at the September meeting are currently at 30 percent.

A weaker U.S. job report, however, may disappoint dollar bulls and lead to a short squeeze in the euro and GBP.

Non-Farm Payrolls, Unemployment Rate and Average Hourly Earnings are scheduled for release at 12:30 GMT.

We wish you successful trades and a beautiful weekend!

Daily Forex signals:

View our daily signal alerts http://www.maimar.co/category/daily-signals/

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We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2015 Maimar-FX.

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U.S. Non-Farm Payrolls

Dear Traders,

We got what we were looking for with our short-entry in the GBP/USD, and we took advantage of almost the entire downward move which has ended in a profit of 110 pips. The British pound dropped sharply after the Bank of England’s monetary policy announcement did not satisfy investor’s expectations. Only 1 member of the monetary policy committee voted for a rate hike – investors had been looking for more than 2 hawks and sold-off the pound as a result. Moreover, the BoE lowered its inflation forecast with Governor Mark Carney indicating that “negative inflation wouldn’t be surprising”. The bottom line is, that the central bank is in no rush to change its monetary policy in the near term.

The euro failed to provide any profitable trading chance yesterday, remaining sideways between 1.0935 and 1.0875. Let’s see if we see more momentum coming up with the U.S. labor-market numbers today.

What to expect from today’s Non-Farm Payrolls?

Economists are looking for a healthy job report with payrolls growth exceeding 200K, a steady unemployment rate and Average Hourly Earnings to grow at a steady pace. If one of these conditions will miss, dollar bulls could be disappointed and drive the USD lower. Arguments for weaker payrolls could be the smaller increase in private-sector jobs according to the ADP report on Wednesday. On the other hand, the ISM index rose by a record level, an argument for stronger payroll growth.

Payrolls are due for release at 12:30 GMT.

We wish you a wonderful weekend!

Daily Forex signals:

 

View our daily signal alerts http://www.maimar.co/category/daily-signals/

Subscribe to our daily signal service http://www.maimar.co/signals/

We wish you good trades and many pips!

Any and all liability of the author is excluded.

Copyright © All Rights Reserved 2015 Maimar-FX.

www.maimar.co