Trading was relatively quiet Tuesday with the U.S. dollar’s latest recovery losing some momentum. After crucial support zones in the EUR/USD and GBP/USD have been tested, it seems that the euro and pound could find a bottom in the near-term.
EUR/USD: The euro strengthened against the greenback after dipping slightly below 1.17. With the 1.17-support still unbroken, our focus now turns to the 1.1820/30-resistance level which could limit gains in short-term time frames.
GBP/USD: The cable was able to stabilize above 1.3235 and we now anticipate some pullback towards 1.3340/50. For the bias to shift from bearish to bullish it would need a sustained break above 1.3460. A lower support is however seen at 1.3180.
How the dollar will trade within the next two days will mainly depend on the U.S. employment data. Today we have the ADP private payrolls (12:15 UTC) and the ISM service sector activity report (14:00 UTC) scheduled for release. Traders should pay close attention to these reports as they could determine how the USD will trade ahead of the U.S. payrolls report on Friday. Furthermore, we have another speech from Fed Chair Janet Yellen at 19:15 UTC.
Sterling traders may also keep an eye on the U.K. PMI report due for release at 8:30 UTC.
After yesterday’s quiet trading we expect higher volatility today and wish you good trades.
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