Daily Market Review September 02



Economic indicators are not supporting the US economy for the moment with a decline seen in the manufacturing sector. US Markit PMI manufacturing index fell to 52.0 for the month of August weighing on the USD. Hence, the greenback edged lower against a basket of currencies also explaining the surge of the EURUSD and GBPUSD pairs. However, as the U.S. job data report (NFP) is awaited at 12:30 GMT today, market sentiment could be altered. Any growth in job sector could consolidate views on the next interest rate decision for U.S. to be held this month.

Elsewhere, growth was reported in the manufacturing sector of UK, which is currently acting as a medium of strength for the GBP. Also, analysts are surprised by the way economic indicators are pointing towards growth in Great Britain despite Brexit risks still loom around. Conclusion is that the UK is faring quite well though Britons decided to part ways with the Eurozone. The GBPUSD pair currently trades around $1.332 level which is the nearest resistance line on this chart.

While all eyes are glued on the Nonfarm Payrolls, shares on the Asian trade turn weaker. A light trading session commenced earlier today and the Nikkei 225 fell by 0.22 percent and the Shanghai Composite gained slightly by 0.02 percent. A missed sentiment was also noted on the Wall-Street as the Dow Jones Industrial Average gained 0.10 percent but the S&P 500 was seen declining by 0.01 percent. Note a gain of 0.27 percent for the NASDAQ. Trading sessions could be mixed today, therefore keep an eye on the major assets is recommended.

Technical Analysis:
The Euro continues to challenge the resistance since yesterday after getting back up from previous lows. This subsequent rally reignited the bullish sentiment on the overall market and traders wonder if this EURUSD race will go on. However, with the NFP (U.S. job data report) awaited today, anything could happen if the USD gets stronger. The EURUSD pair currently hovers around the 1.1205 level after having moved away from the 1.112 level. A superb hammer from the 1.113 pushed the pair up to the 1.119 level and since then the pair even broker above resistance of 1.120 level. Thus, keep an eye on this pair.

The USDJPY pair slightly dropped from the bullish sections yesterday and may navigate in the lows until market sentiment changes. Yesterday, the pair USDJPY session started at the 103.3 level and fell in the initial hours of trading. Later, the pair turned slightly bullish with the help of several momentary jumps which pushed the pair up to the 103.9 level. However, as soon as U.S. manufacturing PMI was released, it was clear that a drop was noted in the sector and this weighed on the US dollar. With the U.S. job data report expected today, keep an eye on the evolution of this pair.
The GBPUSD turned bullish as PMI data suggests growth in the manufacturing sector which signals that the pair may continue to rise. Yesterday, the session for this pair was initiated around the 1.313 level and the pair consolidated before actually rising to the 1.325 level. A nice hammer was noted for the GBPUSD pair which took the pair up to the 1.325 level and from there on, the pair consolidated to close around the 1.327 level. Keep an eye on this pair today as the U.S. job data report today could change its trend. Also note that the closest resistance line for this pair is around the 1.332 level.

 

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