Monday's FX Analysis For AUD, GBP And EUR
SGT Markets | Aug 07, 2017 04:43AM ET
EUR/USD
U.S. Nonfarm Payrolls better than expected.
Spanish Unemployment Change worse than expected. German Manufacturing PMI and German Unemployment Change on the downbeat too.
Deepening U.S. political uncertainty keeps the greenback on the defensive because the Trump administration remains under the cloud of a probe into alleged Russian meddling in the U.S. 2016 presidential election. Still, we think USD is oversold.
On the other hand, ECB remarks appeared to signal a shift towards tapering monetary stimulus, but President Draghi reiterated that any changes to the stimulus program will be “gradual” and “cautious.”
As we wrote previously, 1.1856 is a strong Resistance and it is working. We expected first a re-test back to 0.1756, and it happened. Now eyes on a probable correction down to 1.1655.
Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Overbought
1st Resistance: 1.1756
2nd Resistance: 1.1856
1st Support: 1.1655
2nd Support: 1.1590
GBP/USD
Sterling is falling after the Bank of England left interest rates on hold at record lows and cut its economic growth forecast for this year and next. UK Services PMI index increased more than expected but last UK Construction PMI dropped at the lowest since October 2016.
No doubt that U.K. growth is slowing with the details of the GDP report showing weakness in the manufacturing and construction sectors. Growth is expected to ease further in the coming months as BREXIT gets underway.
British Trade Minister said that it is perfectly reasonable that people want to have some transitional period until the final agreement with UE will be reached. "But we can't have a perpetual transitional period undermining the concept of Brexit itself," he added.
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The agreement between Conservative Party and Democratic Unionist Party is still occupying only the background of the global Sentiment on Pound.
As we wrote, 1.3203 is an ultimate Resistance capable to turn price violently down and our first target in area 1.3099 has been abundantly broken down. The direction is now towards our first Support in area 1.2978.
Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2001:
Weekly Trend: Bearish
1st Resistance: 1.3203
2nd Resistance: 1.3099
1st Support: 1.2978
2nd Support: 1.2830
AUD/USD
Eyes on today Australia Westpac Consumer Sentiment and Australia Home Loans.
Australia Retail Sales better than expected. Australia Trade Balance again on the downbeat but building approvals for June jumped 10.9%, far outpacing a 1.5% gain seen month-on-month.
As we wrote previously, 0.8034 is very strong Resistance and it worked pushing price back to 0.7916 again. We confirm that 0.783 area will have to be retested, and this represents our first target.
Our special Fibo Retracements are confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Overbought
1st Resistance: 0.7916
2nd Resistance: 0.8034
1st Support: 0.7828
2nd Support: 0.7735
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