Soft economic data coming from the US put a damper on higher yielding assets such as the euro, equities, and crude oil as the safe haven Swiss franc rallied to new highs. The dollar climbed despite the negative US economic sentiment while the “risk-off” environment could carry over leading up to the Friday’s non-farm payrolls report.
Today’s Economic Data Releases:
GBP – Construction PMI – 08:30 GMT
Expectations: 53.7. Previous: 53.3.
Disappointing UK manufacturing PMI numbers had sterling on its back foot and the selling intensified following the afternoon sell-off in US equities. A similar outcome may occur today given the weakness in the UK economy. Resistance for the GBP/USD is at 1.6515 with support at 1.6300. A break here would then perhaps test the rising trend line off of the May 2010 low at 1.6140.
USD – Unemployment Claims – 12:30 GMT
Expectations: 416K. Previous: 424K.
Yesterday’s weak ADP payrolls report will likely cause many economists to reduce their forecasts for tomorrow’s non-farm payrolls report. Disappointing employment numbers would likely be a positive for the dollar. EUR/USD support comes in at the overnight low at 1.4300 followed by 1.4250 and 1.4140 from the rising support line off of the May low.
Oil – Crude Oil Inventories – 15:00 GMT
Expectations: -1.5M. Previous: 0.6M.
Spot crude oil tumbled below $100 given the “risk off” environment yesterday. Traders should be eyeing improved sentiment in the equity markets which would help to support crude oil prices. However, technicals indicate crude oil prices may have further room to fall. $97 is the support level from the short term consolidation pattern off of the May low. Resistance is located at $101.80 and $103.40.
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Russell Glaser is a Currency Analyst with ForexYard. Russell provides analysis in the FX spot market by employing fundamental research methodologies. In addition to currencies, Russell closely follows the correlation between the Commodities market and the movement of equities. His writings have been published on the ForexYard Trading Blog and associated partner sites. Prior to joining Forexyard, Russell Glaser served as a management consultant in the financial services industry, advising Fortune 100 companies. Russell holds a degree in finance from the Fisher College of Business at The Ohio State University.
