fxjunkies

Key Themes 

Asian Stocks await key data from the US: Asian stocks were largely unchanged in this mornings trading ahead of key data released from the US this afternoon, namely the unemployment figures and the non-farm payroll numbers.

The Dollar remained at 3 week lows against the Euro yesterday and sensitive to doubts about its reserve status.

However, despite claims that China have asked to debate proposals for a new global reserve currency at the G-8 summit, Vice Foreign Minister He Yafei told reporters that China hopes “that as the main currency the exchange rate of the US dollar will be stable”, prompting a rally in the Dollar this morning (source: Bloomberg)

In the News

Global Downturn appeared to close to a bottom yesterday as manufacturing figures forma cross the world suggested the recession was running out of steam in all the big economies (Source: FT.com). 

UK manufacturing shrank at its slowest pace for a year last month…the manufacturing PMI data rose from 47.0 to 45.4, although anything below 50 is still seen as a contraction.

Data released today:

01:30 – Australian Trade Balance (came out -556M against exp. -125M)

09:00 – EU Unemployment rate (exp. 9.4%)

11:30 – ECB Rate decision (exp. leave at 1%)

12:30 – US Average Hourly Earnings

12:30 – US Unemployment Rate

12:30 – US Non-Farm Payrolls (exp. -375k)*

*UBS have said a 10-20% deviation in these expectations would lead to movement in the Dollar.

Market Sentiment and Consensus

EURUSD

Today – flat, sell if it breaks 1.4063 and buy if it breaks 1.4156

This week – expected higher as long as it doesn’t trade below 1.3888.

Three Month – Expected higher, buy whilst above 1.2458 to 1.3856, and again while above 1.4058.

GBPUSD

Today – Flat, although broken through downside level of 1.6420 and nearing next target of 1.6384. 

This week – expected higher as long as it doesn’t trade below 1.6337.

Three month – expected higher, buy whilst above 1.3504 to 1.5372 and 1.6045

EURGBP

Today – expected flat, trade a break of 0.8549 or 0.8605/0.8688 

This week – expected flat, movement possible if traded above 0.8600 or below 0.8400

Three month – Down, Sell whilst below 0.9553 and 0.8638 to 0.8244.