FOREXYARD: Forex News Blog

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Sterling Weakness Prevails Before Jobs Report Posted: 03 Jun 2011 04:29 AM PDT Leading up to this afternoon's US jobs report the British pound has slipped versus the dollar and the euro with the EUR/GBP recovering to levels prior to the renewal of the European debt crisis two weeks ago. A weaker than forecasted UK Services PMI number slumped to 53.8 from 54.2 on consensus forecasts of 54.4. This had sterling on its back foot with the cable briefly falling below 1.6300 before trading back above the support. The 1.6300 level has significance for two reasons; it is a previous resistance/support level from the high of May 20th and the 20-day moving average is housed there. The move lower in the GBP/USD may have scope back to the rising trend line from the May 2010 lows which comes in today at 1.6140. Sterling was also weaker in the crosses as the EUR/GBP rallied above levels prior to the renewal of the European debt crisis two weeks ago. The EUR/GBP could climb to test the April high at 0.9040. The EUR/USD is trading back and forth before the jobs report. Initially the EUR/USD rose after the euro zone final services PMI came in above expectations but the pair soon gave back those gains and now trades just below the 1.4500 level before the report. As previously discussed a better than expected jobs report may allow the USD to regroup after suffering sharp losses this week to the euro. The EUR/USD could climb to 1.4570 at the 61% retracement from the May declines, but a likely scenario may be the EUR/USD gives back some of the weekly gains before the weekend close. As always the risk runs for off the cuff comments from European or Greek officials as a new bailout package for Greece looks to be forming between the parties. No restructuring of Greek debt will take place at this time but the possibility exists for a debt reduction in the future. Read more forex trading news on our forex blog.

Non-Farm Payrolls Highlights Turbulent Week Posted: 03 Jun 2011 12:20 AM PDT Stemming from the stream of negative US economic data this week economists have scaled back their forecasts' for today's non-farm employment change. Market sentiment has once again shifted against the dollar buta surprisingly positive jobs report may catch many USD shorts off guard. Today's Economic Data Releases GBP – Services PMI – 08:00 GMT Expectations: 54.4. Previous: 54.3 Sterling surged yesterday after better than expected construction PMI numbers but the gains were scaled back later in the New York trading session. While today's services data may have a short term impact on the pound, the kicker will be this afternoon's jobs report. Cable has support at 1.6300 and break here could spur declines to the trend line off of the May 2010 low at 1.6140. Resistance is found at the 1.6515-50 resistance zone. USD – Non-Farm Employment Change – 12:30 GMT Expectations: 194K. Previous: 244K. While consensus estimates are for roughly 194K new jobs to have been added to the US economy in the month of May, economists have largely adjusted their forecasts lower following Wednesday's disappointing ADP jobs report. Market sentiment has once again shifted against the dollar and a surprisingly positive jobs report may catch many USD shorts off guard. Therefore, a pullback in the EUR/USD would not be too farfetched. For the EUR/USD, a move above 1.4570 would set the stage for gains to the May high but a retreat below 1.4350 would shift momentum to the downside. Read more forex trading news on our forex blog.

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