USD Trading Outlook (02-07-2015)

Dollar demand continues and carries to Asia as the market focus shifts from Greece, to NFP. Non-farm payroll is expected to show 234k growth in June while the unemployment rate is expected to drop to 5.4%. This will be the 56th time in a row that US employment has increased. To note however, Goldman Sachs expects the data to disappoint forecasting 220k in June, below consensus of 234k

In the US a very good ADP employment report raised expectations for an equally positive NFP. EURUSD dropped to 1.1050 area waiting for further clues for direction. Next big support level is 1.0960.

GBPUSD broke significant support of 1.5690 and it was all downwards from there which led to the pair hitting a 2 week low at 1.5587.

Noteworthy decliner was Crude oil, which was sold off following the release of Crude Oil inventories which saw an excess of supply. Oil has been trading around 58-60 USD a barrel but is valued at $57 now.

In China, the propaganda ministry ordered state media to publish only positive opinions about the stock market, and not to criticize, however Stocks are in the red again. Elsewhere in Asia, stocks are trading higher.

Data wise, it will not be a very busy morning in the European session, however at 12:30GMT there is a wide number of US releases, including NFP which are guaranteed to spark volatility for the rest of the day.

Trading Quote of the Day: “Vision without action is a daydream. Action without vision is a nightmare.” – Japanese proverb

Green lines are resistance, Red lines are support

EURUSD

Pivot: 1.1155

Likely scenario: Short positions below 1.1155 with targets @ 1.103 & 1.098 in extension.

Alternative scenario: Above 1.1155 look for further upside with 1.121 & 1.128 as targets.

Comment: As long as 1.1155 is resistance, expect a return to 1.103.

GBPUSD

Pivot: 1.568

Likely scenario: Short positions below 1.568 with targets @ 1.558 & 1.554 in extension.

Alternative scenario: Above 1.568 look for further upside with 1.574 & 1.577 as targets.

Comment: Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.

AUDUSD

Pivot: 0.7675

Likely scenario: Short positions below 0.7675 with targets @ 0.7605 & 0.7585 in extension.

Alternative scenario: Above 0.7675 look for further upside with 0.77 & 0.774 as targets.

Comment: As long as 0.7675 is resistance, likely decline to 0.7605.

USDJPY

Pivot: 122.85

Likely scenario: Long positions above 122.85 with targets @ 123.7 & 124 in extension.

Alternative scenario: Below 122.85 look for further downside with 122.35 & 121.9 as targets.

Comment: The RSI is supported by a rising trend line.

USDCAD

Pivot: 1.2525

Likely scenario: Long positions above 1.2525 with targets @ 1.263 & 1.267 in extension.

Alternative scenario: Below 1.2525 look for further downside with 1.247 & 1.2425 as targets.

Comment: Technically the RSI is above its neutrality area at 50.

USDCHF

Pivot: 0.94

Likely scenario: Long positions above 0.94 with targets @ 0.951 & 0.954 in extension.

Alternative scenario: Below 0.94 look for further downside with 0.936 & 0.933 as targets.

Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

GOLD

Pivot: 1175

Likely scenario: Short positions below 1175 with targets @ 1166 & 1162.5 in extension.

Alternative scenario: Above 1175 look for further upside with 1180.5 & 1185 as targets.

Comment: The RSI lacks upward momentum.

OIL

Pivot: 58.4

Likely scenario: Short positions below 58.4 with targets @ 56.35 & 55.8 in extension.

Alternative scenario: Above 58.4 look for further upside with 58.95 & 59.7 as targets.

Comment: The break below 58.4 is a negative signal that has opened a path to 56.35.

DAX

Pivot: 10800

Likely scenario: Long positions above 10800 with targets @ 11285 & 11380 in extension.

Alternative scenario: Below 10800 look for further downside with 10640 & 10435 as targets.

Comment: The RSI is supported by a rising trend line.