The Euro has been a key mover as once again the USD has been driven lower by traders anxious on the US political opera. However, US and European data has also been a big driver across the board, as EU PPI y/y came in slightly above expectations at 2.5% (2.45% exp) which strengthens many traders and economists views, who believe that Europe is indeed on the mend after so much turmoil. In the US we saw disappointing data with the US ADP employment change figure coming in at 178K (190k exp). This will certainly put pressure on the non-farm payroll reading due out at the end of this week, with many hoping to see further employment growth in the economy. What we might find though is that the Trump effect is indeed wearing off and one of the major reasons why the USD continues to struggle to gain any sort of momentum in the currency markets.
The EURUSD has been a pair I touched on a few weeks ago and since then it has continued its bullish streak and today was no different as it looked to extend higher and push through the bullish channel in play. After touching resistance today at 1.1915 it has since pulled back slightly as trades take stock and think about the next passage of play. Certainly, it would seem there is the potential for the USD to come back and force the EURUSD lower in the channel, but how long is a hard question as each day in politics has large impacts on the currency markets. If we are to climb higher though then 1.2060 is likely to be a strong target and a good psychological level for traders. Support levels can be found at 1.1799 and 1.1719 on the charts.
The NZDUSD was my focus pair yesterday and the news was not so good for the economy as private wages and average hourly earnings both missed economists’ forecasts. As a result – even with a weaker USD – the NZD has slipped overnight and looks likely to find itself under further pressure unless some positive economic data comes its way. With nothing now due until the following week, it’s likely that traders will focused on Australian and US economic data for movements in the NZDUSD. Fundamentally the NZD has been very strong as of late, and does not like to climb too higher, but it’s very much a case of a bullish market at present.
On the charts the NZDUSD is still in that bullish trend, but the fall lower has bounced before key support at 0.7400. The bulls are clearly trying to take some control here and stop any further falls but there is plenty of room to move further lower if required. However, I would expect the bears to respect the trend line in the current market climate at present, given how strong it has been and the previous weeks positive economic data.