US Dollar Falls Ahead of October NFP Data 1/11/19

US Dollar Falls Ahead of October NFP Data 1/11/19

Australian stocks and the Aussie rose after the country released manufacturing data. Data from Markit showed that manufacturing PMI declined to 50.3 in October. This was the lowest level in more than three years. Meanwhile, traders reacted to the better-than-expected manufacturing PMI data from China. The country’s manufacturing PMI data rose to 51.7 from the previous 51.4. This data came a day after the disappointing number from China Logistics. China is the most important market for Australian goods like iron ore, coal, and gold. The country exports two-thirds of its goods to China.

AUD/USD Technical Analysis

The AUD/USD pair rose after positive PMI data from China. On the daily chart, the pair is between the channel shown in blue below. The pair is slightly above the 14-day and 28-day moving averages while RSI has been on an upward trend. The signal and histogram of the MACD have been on an upward trend. The pair may continue moving higher to test the important support of 0.6950.

The EUR/USD pair continued rising in reaction to the Fed’s decision to slash interest rates on Wednesday by 25-basis points. This was the third rate cut by the Fed this year. Officials also said that they would pause on more rate cuts. This decision was criticised by Trump, who hoped that the Fed would do more to slash rates. He compared the positive rates in the US and the negative rates in Europe and Japan. Later today, the market will receive jobs numbers from the US. Data from BLS is expected to show that the economy added just 86k jobs. The unemployment rate is expected to increase slightly to 3.6%, while wages are expected to increase slightly.

EUR/USD Technical Analysis

The EUR/USD pair rose to a high of 1.1164 in the Asian session. This is higher than yesterday’s low of 1.1130 and slightly lower than yesterday’s high of 1.1175. On the hourly chart, the pair has formed a cup and handle pattern. It remains above the Ichimoku Cloud as the Tenkan-sen and Kijun-sen make a bullish crossover. The pair may continue moving higher as it tries to break past the important resistance of 1.1175.

The Swiss franc rose ahead of the CPI and PMI data from the country. Data from the Federal Statistics Office is expected to show that retail sales made a slight improvement after falling by -1.4% in August. The market expects CPI to increase slightly from 0.1% in September to 0.3% in October on an annual basis. It is expected to rise by 0.1% on a MoM basis. These inflation numbers are significantly weaker even as the Swiss National Bank continues to leave rates at the negative territory. Manufacturing PMI from Markit is expected to come in at 45.0, slightly above the previous 44.6. In the UK, manufacturing PMU is expected to decline to 48.1 from the previous 48.3.

USD/CHF Technical Analysis

The USD/CHF pair continued to decline ahead of Swiss CPI and PMI data and US jobs numbers. The pair reached a low of 0.9860, which is the lowest level since August 22. On the hourly chart, the pair appears to be forming an inverted cup and handle pattern. It is slightly above the lower line of Bollinger Bands, while the RSI is slightly above the oversold level. The pair may continue moving lower to test the important support at 0.9850.

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