Draghi disappoints ahead of US jobs report
City Index August 3, 2012 6:43 PM
<p> EUR/USD Range: 1.2165-1.2200 Support: 1.2030 Resistance: 1.2410 A real disappointment from Draghi yesterday as last week’s headline comments to save the euro with ‘whatever […]</p>
A real disappointment from Draghi yesterday as last week’s headline comments to save the euro with ‘whatever it takes’ and ‘believe me it will work’ giving way to the usual issues of a delivery response and how they fix it whilst putting the onus back upon sovereign governments with a threat to ‘undertake outright open market operation’ . All in all super Mario went to kick the can down the street and managed to completely miss the can, leaving his credibility somewhat in tatters in my humble opinion. It is all about non-farm payrolls today with traders expecting there could be a test of the year’s lows of 1.2042.
Range: 1.5503 – 1.5530
The queen’s currency remains heavy despite the gold rush seen in London yesterday. The BoE left rates and QE unchanged yesterday as expected, with the pound’s fortunes being driven by the single currency.Before the non-farm payrolls today we see the release of the UK services PMI (the important one for growth in my opinion) at 9.30am, with the consensus being 51.7. It is possible that traders may sell euro/sterling rallies to 0.7915/0.7920.
The cross JPY market is driving the pair with safe haven flows adding to the BoJ’s woes of a stronger JPY. Dollar/yen is extremely sensitive to the US yield curve so today’s non-farm payrolls data will likely be the driving force today. The consensus for non-farm payrolls is +100K with the unemployment rate holding steady at 8.2%. Analysts are expecting that if the number comes out at over +120k, this could spark a positive move in the markets, while a+50k figure could turn sentiment negative.
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