Today’s calendar was full of economic publications with high impact on the Forex market.
For the Euro Area (Italy and Spain) the services PMIs were mainly in line with expectations. A surprise came from Retail Sales which had a 1.0% growth.
The USA reports were the most expected by investors. The ADP Non-Farm was published above expectations, 188K. This good reading was balanced by a lower Trade Balance, 45.0B, Unemployment Claims in line with the expectations, 343K, and a lower than expected ISM Non-Manufacturing PMI, 52.2.
Chart: EURUSD, H4
Euro with the US dollar had a dip right after the ADP release, but it didn’t last too much because the next data from United States have pushed the dollar lower and the quotation got back above 1.3.
On the chart we can see several bullish signals. First, the price action made a Falling Wedge, second the RSI made a positive divergence. If the signals will be confirmed, we might see a rally of the euro back to 1.3100 or 1.3190.
Chart: GBPUSD, Daily
In our last analysis on GBPUSD (FX: GBPUSD Is History Repeating Itself?) we were expecting for this pair to recover after an important fall. After a false breakout under the support the British pound started to gain. Today’s rally was triggered by a very good Services PMI (56.9 vs. 54.6 expected).
At this point a Bullish Engulfing was drawn. This pattern could be the confirmation needed for an up move. A rally of the GBP could get the price up to 1.5350 or even 1.5400.
Chart: USDJPY, H4
The dollar gained 7.5% in front of the Japanese yen during the last month. Now we can see that the price is pretty close to the trend’s line. A break under it, or better said, under the 99.25 support could trigger another fall for the US dollar. Potential targets for a fall are 0.382 retrace (98.13) and 50% retrace (97.30).
If the local resistance, 100.15, will be broke, we can expect a rally back to 100.80 or even higher, to 101.00.