Forex Signals US Session Brief, August 30th – Dead Quiet Before the US Employment Report
Skerdian Meta • 3 min read
The biggest economic data of this week was reserved for today and it is the US employment report. The USD made a round trip yesterday, it went up at first but then it reversed on some FED talk. Today though, the price action is quite numb so we haven’t had opportunities to do much trading. Well, let’s see what’ going on in the financial markets today.
Frozen Before the Employment Report
Everything seems to have been frozen up today. USD/JPY traded in an 80 pip range yesterday after having climbed more than 200 pips in the previous few days. Today though, the range is as tight as it gets, only around 20 pips.
The situation is not much better for EUR/USD and GBP/USD. Yesterday we saw these 2 forex majors make a turnaround; they first fell around 80-100 pips and then they claimed back all the losses in the afternoon. So, there was quite some activity in these 2 forex pairs yesterday, unlike today.
The commodity block has been a mixed bag so far today. The Kiwi and the Aussie are around 20-30 pips down while the Canadian Dollar has claimed back the losses and is up against the USD now, although this is more of a reaction to yesterday’s impressive Canadian GDP report
Is Gold Trying to Tell Us Something, Again?
In one of our market updates yesterday, I highlighted the run up in Gold a day before the other forex majors followed its course. On Monday, Gold broke a massive resistance level which stood around $1,308 while major forex pairs were doing nothing.
On Tuesday, the other forex majors joined Gold and everything broke loose. EUR/USD broke above the 1.20 level for the first time in a few years.
Eventually, the price retreated in all these instruments and EUR/USD and Gold fell back below those resistance areas.
But it didn’t last long for Gold; It got close to the 50 SMA (yellow) on the H4 Gold chart and it reversed back up pretty quickly, reaching the highs again while other forex pairs haven’t moved.
Now, is this another signal/sign that points up for other majors against the USD? Will we see 1.20 get broken again in EUR/USD? Well, the US employment report might do that in about 30 minutes actually.
We're back above resistance
US Employment Report
Shortly, we will get to see the US employment report which includes unemployment claims, unemployment rate and the average hourly earnings.
The non-farm employment change and unemployment rate are not supposed to do much damage today, unless the numbers really are off the charts. The unemployment rate is supposed to remain steady at 4.3% which is below the natural unemployment level (5%) while the non-farm employment change number is expected to be around 30k lower than the previous reading.
The average hourly earnings on the other hand have quite some potential to shake things up. They´re expected to decline by 1 point from last month, at 0.2%, so it would be a positive surprise if we see the same reading as last time, which would boost the Dollar of course.
Although, the big move will come if the actual reading deviates 2 points from expectations. If the reading is flat, that would force the FED to back up even further from their monetary tightening path, so I would expect the US>D to take another beating.
If the actual number comes at 0.4% or above, then this might be a decisive factor for the USD and we might see USD resume the bigger uptrend again. We still hold that long term EUR/USD sell signal, so today’s numbers are very important.
We´re not presenting trade ideas today because of the US employment report which will be released very shortly. But, it’s very likely that we will become more active after this report is published, so keep an eye on our forex signals and analysis for the remainder of the day/week.