Dollar maintains gains on October payrolls data

John Benjamin Orbex

The US dollar closed last Friday on a stronger note as the US nonfarm payrolls showed a rebound. The US economy was seen adding 261k jobs during October with September and August payrolls numbers being revised higher as well. The unemployment rate fell to fresh lows at 4.1%, but average hourly earnings remained muted. The ISM non-manufacturing PMI was seen rising to 60.1, beating expectations of 58.5.

Earlier today, the New Zealand inflation expectations data showed that consumer prices were seen rising 1.87% for this year. For the next two years, the forward looking inflation expectations data showed that headline consumer prices are expected to rise 2%. The data comes ahead of this Wednesday's RBNZ monetary policy meeting.

The economic calendar is light today with only the Canadian Ivey PMI data coming out. The FOMC member Dudley is expected to speak later in the day. Data from the Eurozone is quiet with the services PMI numbers due for release.

EURUSD intraday analysis

EURUSD (1.1609): The EURUSD closed on a bearish note on Friday. The bearish engulfing pattern formed on the daily chart could suggest further downside momentum. On the 4-hour chart, price action has broken out from the bearish flag pattern. However, the EURUSD will be seen testing the previous lows near 1.1573. A break down below this low will indicate further declines in price. Alternately, if support is established higher, EURUSD could remain range bound and potentially invalidating the bearish outlook.

USDJPY intraday analysis

USDJPY (114.26): The USDJPY closed with a doji candlestick pattern on the daily chart on Friday. This comes near the resistance level of 114.31 - 114.07. Price action has been struggling to break out from this resistance level in the past few sessions but with little success. On the 4-hour chart, the inverse head and shoulders pattern was, however, validated as USDJPY broke out above 114.24. As long as this price level holds, USDJPY could be seen pushing higher. A close below 114.24 on the intraday basis could, however, signal the sideways momentum to continue.

EURGBP intraday analysis

EURGBP (0.8880): The EURGBP which posted strong gains on Thursday on the back of the BoE's rate hike was seen giving up some of the gains. EURGBP could be seen pushing lower as price action approaches the breached resistance and support level near 0.8867 - 0.8857. Establishing support at this level will suggest renewed bullish momentum to the upside. The next main target for EURGBP comes in at 0.9016. However, in the event that EURGBP slips below 0.8857, the bias could turn bearish as EURGBP risks pulling down lower towards 0.8778.

Author

John Benjamin

Orbex

John is a market analyst for Orbex Ltd. and is a forex and equities trader having been involved in trading since late 2009. John makes use of a mix of technical and fundamental analysis and inter-market relationships.

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