The Dollar rose against the Euro, Sterling and Yen yesterday after the Institute for Supply Management’s services index rose in June to its highest level in a year, beating forecasts for a small decline.
Activity was subdued in Asian trading however, as the market is waiting for the US payrolls due later today for more clues about the future path of the Fed’s monetary policy.
Economists forecast a median 120,000 new jobs were created in June compared with 157,000 jobs in May, while the unemployment rate is seen unchanged at 4.5%.
Another US report yesterday from private employment services company ADP Employer Services pointed to strong job growth, leading market participants to believe that the Labor Department’s jobs data at 12:30 GMT will be better than expected.
The Dollar is trading at 123.10 Yen, little moved from late New York trade. The Euro is also steady at $1.3595, off a two-month high of $1.3660 hit yesterday.
The European Central Bank left interest rates on hold at 4% yesterday, as expected. At the same time, the central bank suggested it would tightened rates in coming months to fight inflation.
A Reuters poll showed on Tuesday a majority of economists expect the ECB to raise rates in September.
The Bank of England raised interest rates yesterday, as expected, to 5.75% and said inflation risks remained on the upside. A Reuters poll taken shortly after the BoE’s rate announcement showed that just over half the economists surveyed forecast British interest rates will hit 6% this year.
Technicals:
EURUSD
Resistance at 1.3634 and 1.3673/82. Support at 1.3581 and 1.3527.
GBPUSD
Resistance now at 2.0160 and then 2.0200. Support at 2.0095.
USDJPY
Bullish with next target at 123.28 and then 123.75. Support at 122.70 and 122.07/14.
EURJPY
Resistance at 167.50and 168.00. Support at 167.19 and 166.50.
AUDUSD
Prices are pushing higher with resistance at 0.8598. Support at 0.8550 and 0.8494.
FX Overview
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