Alpesh Patel's NEWSLETTERPRO - Draghi sends Euro to 1.36, will today’s jobs report boost or crash it?

Share On Facebook
share on Linkedin
© Alpesh Patel

As we mentioned in our report yesterday, the Euro was the currency that markets were focused on as the European Central Bank announced its key interest rate and President Draghi held the usual press conference. The ECB didn’t change the interest rate’s levels but the outcome of his remarks was a radical rise for the European currency that overtook 1.3550 and peaked just above 1.3600 against the US Dollar.

Draghi’s comments were the reason behind this move higher and some may wonder on what did he really say to cause this. The important thing however is not what he said, but what he failed to mention. Most analysts expected Draghi to focus his comments on the low inflation and the emerging markets’ problems but what he did is that he left all that aside disappointing investors that were ready to short the Euro based on that hypothesis. Instead, in contrast to the previous month’s press remarks, he acknowledged the improvements in consumer demand and investors’ confidence and this was enough to spur a rally higher.

Now the focus for today shifts from the Euro to the US Dollar as the extremely important Non-Farm Payrolls report is scheduled for release. The report is a key market driving event as it monitors job growth and unemployment in the US and its release pretty much hints on Dollar’s outlook for the following period. The report missed expectations by far last month disappointing Dollar traders and drove the currency lower but this month analysts are making word of a significant rebound.

Again, the thing to focus on is not whether a rebound will come or not as this is almost certain. The thing to focus on is how much of a rebound will we see. And this will be a tricky release as leading indicators used to assess whether the release will be strong or not are mixed. As we mentioned in our reports previously this week the employment component of the Non- Manufacturing ISM report showed signs of improvement in the jobs sector and the Initial Jobless Claims fell yesterday but on the other hand the Manufacturing ISM employment component and the ADP Employment figures recently released paint a different picture.

Analysts are calling for an increase of 180k jobs added the previous month and if the number comes in line with expectations then the Dollar will run a relief rally higher after being under pressure yesterday. However, any number below the 125-130k jobs added will re-ignite the sell-off and we could see the Euro reaching 1.3700 and the Pound near the 1.6450 mark.

British Production and GDP figures expected along with the jobs report from the US

The most important event of the day in undeniably the jobs report coming from the US at 13.30 but earlier and later in the day British Production and GDP figures are also scheduled for release. The Industrial and Manufacturing Production levels are expected early in the morning and expectations are set for a slight decline in both sectors. Any surprises higher however could send the Pound towards 1.6400 so caution is advised.

The jobs report from the US will follow and we discussed this in detail above, however the day will close with the GDP forecast at 15.00 and even though markets will most likely be trading on the back of the NFP report it’s worth noting the numbers here as we can further assess Pound’s outlook down the road.

Economic Calendar

Time

Currency

Event

Importance

Forecast

Previous

9.30

GBP

Industrial Production

Medium

2.3%

2.5%

9.30

GBP

Manufacturing Production

Medium

2.3%

2.8%

13.30

USD

Change in Non-Farm Payrolls

High

180K

74K

13.30

USD

Unemployment Rate

High

6.7%

6.7%

15.00

GBP

NIESR GDP Estimate

High

0.7%

 

 

TECHNICAL ANALYSIS & LEVELS

EUR/USD

GBP/USD

FTSE 100

Gold

This is the freely distributed Morning Brief section of the NewsletterPro report, a subscription-based product.
If you would like to receive the full version of the report along with specific trading suggestions, please subscribe by clicking 
here

 

Disclaimer Notice

Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite.

InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20200806 07:51:24