TRADERS WAIT FOR TOMORROW’S NFP RELEASE IN THE US
Publication of the previous ECB’s meeting minutes today resulted in the growth of EUR/USD. Hints were made about the possibility of reducing the amount of quantitative easing in the Eurozone due to the improving economic situation. Additional pressure on the US dollar came from the ADP report on non-farm employment change that in June showed growth by only 158 thousand compared to forecasted 184 thousand. Keep in mind that the major unemployment and non-farm payrolls report in America will be released tomorrow and may become a trigger for some sharp moves.
The weakening of the greenback resulted in raising volatility for the British pound. Bulls in GBP/USD are unable to push the price higher than multi-month maximums near 1.3050, but strong moves are possible tomorrow after the release of statistics on industrial production and trade balance in the UK.
Geopolitical tensions concerning the recent missile tests by North Korea give some support to gold, but the expectation of monetary tightening by a number of central banks will keep pushing downwards on the precious metal. Oil regained some ground after a strong descending impulse yesterday. The global supply glut is still negatively affecting the mood of traders. Later today important data on crude oil inventories in the US will be released at 15:00 GMT. The previous report showed a decrease in oil production, but this situation was most likely caused by the tropical storm in the Gulf of Mexico. Despite today’s upward movement, the potential for continued increase is limited.
The single currency quotations were able to leave the limits of the local descending channel and break through resistance at 1.1350. The next targets in case of continuation of the current growth will be at 1.1450 and 1.1500. The RSI on the 15-minute chart reached the overbought zone, indicating the possibility of a rollback to the nearest support at 1.1350. Increased level of volatility is likely to remain until the end of the week thanks to important labor market statistics which will be released tomorrow.
The pound keeps moving along the lower boundary of the channel - the limits of which it had left earlier. In the case of a successful attempt to break through 1.2950, the next target level will be 1.3030. On the opposite side, in order to switch to a negative trend, the price has to overcome support at 1.2890. The reason for increased volatility tomorrow may come after the block of macro data on trade balance and industrial production in the UK.
Gold looks stronger amid rising interest in risk-free assets, but the quotes remain under the 1230 level. After the end of consolidation within the range 1217-1230, we are likely to see a strong movement. Purchases may resume near the psychologically important level of 1200 and the closest targets, for now, are 1215 and 1205. A firm signal for the resumption of growth may come from gaining a foothold above 1240. In this case, the targets will be at 1270 and 1290.
The American crude oil benchmark restored most of its previously lost positions after it could not fix below 45.00. Now the quotes are located below resistance at 46.00 and its breaking will likely lead to further increases up to 47.00 and 47.75. After recent growth, we see the possibility for a price retreat to 45.40 and 45.00. Volatility is likely to stay high today and tomorrow.