The main focus of the day will be the ECB rate decision and the press conference at 12:30 GMT. ECB is not expected to change anything in regards to rate or the 60 bln monthly asset purchase program. Look for the ECB president to face questions on china’s slowdown, the EUR recent rise, and weak commodity prices, all of which point to near 0% inflation in coming months. EURUSD came off its highs yesterday and broke a key technical level indicating temporary weakness. Key support is 1.1160.

Yesterday, weak ADP employment numbers were ignored by the market as it seems the expectations for a strong NFP report on Friday are setting the expectations also for a strong USD. The greenback recovered some of its losses which caused also a new 3 month low on the GBPUSD which hit 1.5263. Watch the UK Services PMI on Thursday – a downbeat surprise could trigger a further selloff.

China markets are closed today so markets were benefited with the absence of fear for another crash. With stock markets taking a breather in the region, USDJPY managed to creep higher but was limited to under 120.50. JPY is inversely correlated to stocks, so when they rise, JPY is sold off.

AUDUSD fell hard on the simultaneous release of retail sales and trade balance data; retail sales was particularly disappointing, falling much more than expected in July

Trading Quote of the Day:

Your ability to stick to the strategy is more important than the strategy itself

EURUSD
Pivot: 1.126
Likely scenario: Short positions below 1.126 with targets @ 1.12 & 1.1155 in extension.
Alternative scenario: Above 1.126 look for further upside with 1.129 & 1.132 as targets.
Comment: The pair has broken below a rising trend line and remains on the downside.

 

GBPUSD
Pivot: 1.534
Likely scenario: Short positions below 1.534 with targets @ 1.526 & 1.521 in extension.
Alternative scenario: Above 1.534 look for further upside with 1.538 & 1.5445 as targets.
Comment: The RSI is mixed to bearish.

Print Friendly, PDF & Email

Related Posts