Friday’s soft payrolls report sent the U.S. dollar weaker as the U.S. economy was seen adding 138k jobs in May compared to forecasts of 184k. The weak headline print overshadowed the fact that the U.S. unemployment rate fell to a 16-year low at 4.3%.
EURUSD rallied to a fresh 7-month high as a result. Looking ahead, the markets today will focus on the services PMI across the EU, UK and the U.S. In the U.S. the ISM non-manufacturing PMI is expected to slip a little to 57.1 compared to April’s 57.5, while in the UK, the services PMI is expected to fall to 55.1 from 55.8 last month.
The weekend terror attacks in London, alongside Trump’s withdrawal from the Paris climate accord has also kept the markets on the edge.
EURUSD intra-day analysis
EURUSD (1.1266): The EURUSD is seen currently pulling back lower from Friday’s highs but the price action remains biased to the upside. Technical support is seen at 1.1236 which could be tested in the near term but following a decline to this level, the euro could once again push higher. However, with the ECB meeting due this Thursday the EURUSD could remain range bound. A decline below 1.1236 will keep EURUSD moving sideways with the next support seen at 1.1200. Only a strong decline below 1.1200 will signal a move to the downside with 1.1100 and 1.1000 coming into question.
GBPUSD intra-day analysis
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GBPUSD (1.2869): The British pound opened lower today following the doji close on Friday and Thursday. Price action is likely to stay flat with the UK general elections due this Thursday. Support is seen at 1.2800 which could be tested in the near term. A breakdown below 1.2800 will signal the head and shoulders pattern seen on the daily chart. This will trigger the downside towards 1.2600. On the 4-hour chart, price action is rather volatile although any upside could see the current gap being filled.
XAUUSD intra-day analysis
XAUUSD (1280.49): Gold prices are seen pushing higher from Friday’s close. With the current sentiment in the markets, the landscape is broadly favorable for gold prices. With the resistance level at 1274.00 being breached, gold prices are likely to see further upside. However, watch for a potential dip back to 1274.00 where support could now be established. To the upside, 1288, which marks the highs from April 21 will be the next upside target.
