Forex Mid-day Brief

Well, this morning’s U.S. economic data release has come and gone. As mentioned earlier, the data was likely to drive the markets of several key asset classes. All in all, the report was taken by the market as a step in the right direction for the U.S. economy.

So far, this is what we have seen:

• Bearish runs in the EUR/USD, GBP/USD

• Rallies in the USD/CAD, USD/CHF, USD/JPY

• Sell off in Gold futures

• Rotational WTI Crude oil futures

Stay tuned as some key technicals come into play later on in the session. With any luck, we will grab a few good trades as we close the week.

U.S. Employment Statistics

U.S. employers added 209,000 jobs in July, above the 183,000 analysts expected. This number is down from the previous release. The unemployment rate was on par with expectations at 4.3%, down a bit from the last release of 4.4%.

In total, these numbers have been taken as positives. A prompt re-Tweet of the report by President Trump shows a bit of enthusiasm from the White House.

U.S. Trade Balance

Another key talking point of last year’s U.S. electoral cycle was the trade balance. Today’s report of -$43.6B is an improvement from the previous release, and in under projections. Highlights were a decreasing goods gap and a services surplus.

Again, these are signs of strength from the U.S. economy. The gains seem moderate, but to the market, a gain is a gain.

EUR/USD

The EUR/USD has taken a dive as strong numbers out of the U.S. are bringing some skeptics into the market.

EUR/USD Daily Chart

Selling dominated trade immediately after the news. Now we are seeing a full blown trend day down after some intermediate consolidation. Here are the important intraday technicals:

• 38% of the run on the daily timeframe at 1.1795

• 50% of daily run at 1.1760

• EUR/USD has sold hard under last session's low.

• As I mentioned earlier this week, buying pullbacks is a possible way to trade this market. Buying on intraday compression between 1.1795-60 is a solid trade to stay with the macro trend.

Bottom Line: The economic data out of the U.S. was better than expected. If the EUR/USD gives us a shot to buy a pullback it is a must trade. A long from the 1.1795-60 range on 30 or 60-minute intraday compression is a possible entry. Timing is everything, so confirm that the selling pressure has subsided before entry and align risk with reward.