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Currency analyst

Morning brief for November 4, 2016

EUR/USD rose yesterday having approached 100-day MA at 1.113 on the daily timeframe. The uncertainty about the outcome of the upcoming US presidential election continues to pressure the greenback. The latest polls indicate that Clinton has a narrowing lead over Trump. The US statistical data released yesterday were mixed. US non-farm productivity saw an increase of 3.1% for the third quarter. US unemployment claims were higher than consensus forecasts.  Factory orders were a beat of expectations; durable goods orders were not upbringing.  US ISM manufacturing was also weaker at 54.8 (the forecasted estimate was 56.0).  In the course of the latest session, the euro slid down to 1.1088. Not the euro is clinging to the 1.1095 mark. Today’s focus will be on the US non-farm payrolls report, unemployment rate and average hourly earnings which are going to be released at 14:30 (Metatrader time). They could cause some moves in the technical charts. But their effects will be a bit offset by the presidential election.

USD/JPY edged down yesterday on growing concerns over the US election outcome. Prices broke support at 102.8, but didn’t fall further. At the present moment, quotes recouped their losses paving the towards 103.5 resistance. But it looks more like a small correction, as we expect more investors scooching their money to safe-haven assets before November 8 (US election).  

The pound was the main mover of yesterday’s trading session. It surged on the High Court decision saying the government needs parliamentary approval to trigger Article 50.  In addition, the BOE board and governor Mark Carney sounded hawkish in their statement and expectations for inflation. GBP/USD almost reached the 1.25 resistance which is the biggest performance since October 7th tremendous downfall. The pair slipped a little in the course of the last session, having showed that uncertainty over the Brexit is still hovering in the air and that sterling remains to be vulnerable to the news.

AUD/USD lost some points having slipped towards 0.7660 support. For Australia, we got some economic data and the Reserve Bank of Australia monetary policy statement. Retail sales for September showed 0.2% increase followed by 0.3% rise in August (but it seems that this increase could be attributed to the rise in prices, not actual volume). The RBA didn’t change its forecasts for inflation and GDP growth painting a rather positive outlook for China’s economy. We must admit that the board members sounded a bit dovish at the meeting having showed their readiness to recourse to easing if needed to spur the economic growth.

USD/CAD remains stuck against the 1.340 mark despite falling oil prices. The Canadian labor data will be released later today.  The expectations are for -10K in employment change (as last month figures were oversized) and 7% unemployment rate (no changes is expected according to the consensus forecast).  CAD could lose some points if the data reports are distorted. 

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