US ADP is due to be out today and will send us a hint for the upcoming Non-farm Payrolls report at Friday.
Economical News
USD
The greenback has been appreciating a bit against the majors in the last 24 hours, as traders are trying to push it a bit higher before the end of the week, mainly due to the hawkish comments from Federal Reserve's Poole regarding a possible rate cut.
The biggest issue this week will probably be the US labor market, as traders look ahead to this month's job reports, which includes the Unemployment Rate and the always attractive Non-farm Payrolls report. The forecast for the jobs report is very high in relation to last month's numbers, and stands at 125K after coming in at 97K last month.
There are two major news events expected today in the US Market, the ADP Non-farm Employment Change and the ISM Non manufacturing index.
The ADP Index is considered to be the best forecasting tool for the Non-farm Payrolls as it measures the exact same sector of the Non-farm employment change. Last month expectations were not correct and stood at 57K with an actual figure of 97K. This month's expected figure is 125K, and is exactly the same as the expectation for the NFP.
The ISM Non Manufacturing Index which measures the activity level of purchasing managers in the services sector is expected to come in slightly higher than last month's 54.3 at 54.8.
It looks as if the expectations from the US market are relatively high this week, and if all actual figures will be released inline with expectations we might see a local rebound for the Greenback.
EUR
The Euro-Zone PPI which was released inline with expectations at 0.3 and the lack of any other interesting information from Europe caused the EUR/USD to be bound to a range for most of the European trading session. Today would probably look a bit different as there are several news events expected from Europe.
The first news event is the German Services PMI which is expected to come in a bit higher than last month at 57.5.
Following this will be the release of the Euro-Zone Services PMI with expectations of 57.6, also a bit higher than last month.
The most important piece of information that is expected to come from Europe today would be the Euro-Zone Retail sales at 10:00 GMT. The Retail Sales figure is expected to boost up to 1.0% after coming in very low last month at -1.0%, and might create a local bullish push for the EUR if it releases inline with expectations.
JPY
The JPY has been rallying down since the beginning of March, putting carry trades back in motion. The only important piece of information that was released from the Japanese market yesterday was the monetary base which came in higher than expected at -19.1% after expectations of -22.0%. The report did not affect the downtrend so much as the JPY went down further.
The ongoing JPY weakening has raised the issue of whether the Japanese economy will be discussed during next week's G7 meeting, and maybe put some positive energy into the weak currency.
As a whole it looks like the JPY will be submitted to external price movers, which will culminate in the shape of Friday's Nonfarm Payrolls.
Technical Analysis
EUR/USD
The 4 hour slow stochastic is crossing at 20, building strength to try and test the resistance at 1.3373 once more, however a failure to gain momentum for a new high will drive this pair backwards to the first retracement.
GBP/USD
Hourly charts are mixed when the RSI is at 70 and the slow stochastic is crossing at 20 . However on the daily chart we can see a near breakout of the 1.9872 resistance level that was tested earlier today.
Support level is located at 1.9723 which may offer a tight range today.
USD/JPY
The 4H chart is showing us that the aggressive bullish trend has come to an end, where the RSI is at 85 and slow stochastic at 95, calling for the bears to come, so get ready for them .
USD/CHF
The 4H RSI 77 and slow stochastic crossing at 88 suggests that a bearish trend is knocking on the door .
Support level is located at 1.2160 which may suggest an attractive target for traders today.
Wild Card
GBP/JPY
This forex pair has reached the heavy resistance level at 235.08 and failed to break upwards, it also reached the upper Bollinger band on the 2H chart. The major long term trend is still up even though last week came with a rather bearish correction.
Today we expect a slightly bearish behavior as hourlies oscillators imply an upcoming bearish trend .
Market Trend
| EUR/USD | GBP/USD | USD/JPY | USD/CHF | AUD/USD | EUR/GBP | |
|---|---|---|---|---|---|---|
| Daily Trend |  |
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| Weekly Trend | |
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| Resistance | 1.3456 | 1.9906 | 121.67 | 1.2391 | 0.8242 | 0.6865 |
| 1.3398 | 1.9826 | 120.44 | 1.2348 | 0.8200 | 0.6837 | |
| 1.3373 | 1.9787 | 119.33 | 1.2257 | 0.8169 | 0.6807 | |
| Support | 1.3306 | 1.9678 | 118.27 | 1.2156 | 0.8080 | 0.6727 |
| 1.3255 | 1.9562 | 117.54 | 1.2105 | 0.8008 | 0.6648 | |
| 1.3205 | 1.9441 | 116.43 | 1.2043 | 0.7958 | 0.6600 |
Indicators
| Date | Time GMT | $€£¥ | Event | Period | Prev. | Forecast | Imp |
|---|---|---|---|---|---|---|---|
| 04/04/07 | 10:00 | EUR | German Factory Orders | (M/M) | -1.0% | 0.6% |  |
| 04/04/07 | 12:15 | USD | ADP Nonfarm Employment Change | Mar(M/M) | 57K | 125K |  |
| 04/04/07 | 16:30 | USD | ISM Non-Manufacturing Index | Mar | 54.3 | 54.8 |  |