Daily outlook - 03 August 2012

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Category: Daily

Created on Friday, 03 August 2012 08:26

Written by Easy-Forex

U.S. Dollar Trading (USD) the market was filled with positive outlooks going into the ECB press conference and the USD was on the back foot as the EUR/USD shorts were clutched to day highs scared they would be trapped on the wrong side of the market. ECB President Draghi was very unsatisfactory though and the early rally was reversed abruptly to new week lows and could possibly test 1.2000 in coming days. Looking ahead, July NonFarm Payrolls forecast 100k vs. 80k. July Unemployment Rate forecast unaffected at 8.2%. July Services ISM forecast at 52 vs. 52.1 earlier. 

The Euro (EUR) the pre ECB change saw a move above 1.2400 before Draghi failed to bring a strong plan for the Eurozone. The market was expecting instant measures to be proclaimed so we saw the pair decrease back below 1.2200 in a fierce move down. The market will be looking to the downside on crosses and the majors with more weight to be applied to the EU politician’s to rapidly decide on new measures. The Sterling (GBP) the GBP/USD rallied with the Euro pre Draghi and the BOE did as predicted leaving interest rates at 0.5% and Asset purchase program at 375bn. EUR/GBP spiked to 0.7900 but finished back below 0.7850 as the Euro was sold heavily in the US session. Looking ahead, July EU PMI Services forecast at 47.6 vs. 47.6 earlier. Also ahead, UK PMI services forecast a t51.5 vs. 51.3 beforehand.

The Japanese Yen (JPY) the USD/JPY was sidelined as the major responded to Draghi press conference but the EUR/JPY was up and down following the EUR/USD moves. The main occasion for the USD/JPY is tonight from the US Non Farm Payrolls data. Good data will further postpone more FED stimulus while bad data will cause selling both on Yen crosses and on USD/JPY as QE3 will be fully priced in for the next meeting. Australian Dollar (AUD) the AUD/USD hit multi month highs temporarily overnight above 1.0550 from the short squeeze on the EUR/USD before Draghi lifted all majors. The sharp selling afterwards on the EUR/USD and US stocks upset the Aussie but it held up better than most with the EUR/AUD hitting fresh all-time lows under 1.1650. Looking ahead, no data till next week.

Oil & Gold (XAU) Gold fell below $1600 with the USD strength but found support at $1585. OIL/USD fell with US stocks to $87 a barrel.

Pairs to watch

EUR/USD to test 1.2000 in coming days?

EUR/AUD can the fall continue or will the resilient AUD break lower?

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