Last week, US employers increased more than double the number of jobs forecast, showing a solid labor demand that softens recession fears and implies that the Federal Reserve will press on with steep interest-rate hikes to prevent inflation.
Next week, a light calendar ahead due to the August holidays slowdown. The most important figure will be the US Consumer Price Index (CPI). Consumer prices account for most of the overall inflation. Also, other high impact data announcements include the US Producer Price Index (PPI), Unemployment Claims, the UK GDP and the US Preliminary University of Michigan (UoM) Consumer Sentiment.
The most important economic data for next week will be as follows:
- Early Monday the New Zealand’s quarterly Inflation Expectations
- Tuesday will be relatively quiet with low impact announcements.
- Wednesday the most important number of the week the US CPI will be released before the US open of the market.
- Thursday, the Japanese banks will be closed in observance of Mountain Day. The US PPI and US Unemployment Claims will be released later before the opening of the US Stock Markets.
- Early Friday, The UK will release its quarterly Preliminary GDP and monthly GDP. Later, the US will release its Preliminary University of Michigan (UoM) Consumer Sentiment.
Major Currencies Performance and Signals
EUR/USD
The EUR/USD currency pair went back and forth last week as we continue to see a significant amount of noisy behaviour between the 1.01 level, and the 1.03 level. On the pair we are Bearish this week.
FORECAST: SELL
Resistance: 1.0200, 1.0250, 1.0300
Support: 1.0150, 1.0100, 1.0050
GBP/USD
The GBP/USD currency pair initially rallied during the trading week but gave bank gains as we slammed into the 1.20 level. We remain bearish on the pair.
FORECAST: SELL
Resistance: 1.2100, 1.2150, 1.2200
Support: 1.2050, 1.2000, 1.1950
AUD/USD
The AUDUSD pair edged higher to 0.7045 last week but retreated since then. Initial bias is neutral this week first. On the downside, break of 0.6858 minor support will argue that the rebound is over. We remain bearish on the pair.
FORECAST: SELL
Resistance: 0.6950, 0.7000, 0.7050
Support: 0.6900, 0.6850, 0.6800
USD/JPY
The USDJPY pair fell initially during the trading week but then turned around near the ¥1.31 level to show signs of life. We are bullish on the USDJPY pair.
FORECAST: BUY
Resistance: 135.00, 134.00, 134.50,
Support: 133.00, 132.50, 132.00
USD/CAD
The pair closed the week higher as the dollar strengthened and the Loonie weakened. Our weekly USDCAD forecast is bullish as the upbeat US jobs report gives the Federal Reserve room to be more aggressive.
FORECAST: SELL
Resistance: 1.2950, 1.3000, 1.3050
Support: 1.2900 1.2850, 1.2800
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