ASIC and FCA licensed Retail FX broker AETOS Capital Group have provided their daily commentary on traditional markets for May 3, 2019.
GBPUSD
The Pound closed lower on Thursday, closing at 1.3031(-21 pips) against the greenback. The cable pair traded lower yesterday as dollar strengthened and as the Bank of England ‘s Super Thursday left traders with their hands empty. The central bank sent a mostly encouraging message, reviewing to the upside growth forecasts but to the downside inflation ones, anyway foreseen a rate hike, or even two in the horizon.
However, the market didn’t forget that Carney would leave before the year-end and any rate hike will likely need to wait for the next one, which means that it won’t be his decision. Mr. Carney remarked that the outside risk has decreased, but that local uncertainty persists.
The BOE left rates and the APP unchanged by a unanimous vote. This Friday, the April Markit Services PMI will be out, expected to print 50.50 vs. the previous 48.9. In the Brexit front, news indicated that a cross-party agreement is around the corner, although not confirmed yet.
GBPUSD 4 Hour Chart
In the chart above, both the 100(Blue Line) and 200 SMA(Red Line) acts as dynamic resistance and support as the pair seems to be consolidating as we approach the Non Farm Payroll data release. The main driver for the pair today will be heavily reliant on fundamentals today as traders await for the data to be released at 22:30 AEST.
EURUSD
The Euro closed lower today at 1.1172(-30 pips) against the greenback. The EUR/USD pair, hit a daily high of 1.1218 on the back of modest upward revisions to manufacturing output in the Union, although, according to Markit, growth in the sector remained in contraction territory, with the final April PMI resulting in 47.9. German index, registered 44.4 in April barely up from March’s low of 44.1, also in contraction territory.
There was no new catalyst for dollar’s advance, as local data was mixed, but a follow-through of the movement triggered by the Fed on Wednesday. Ahead of the US Nonfarm Payroll report, the US released the Challenger Job Cuts report, which showed that US-based employers announced plans to cut 40,023 jobs from their payrolls in April, down 34% from the 60,587 cuts announced in March. Initial Jobless Claims, however, rose to 230K in the week ended April 26, above the 215K expected. Q1 Nonfarm Productivity resulted upbeat, increasing 3.6% although the Unit Labour Cost in the same period declined by 0.9% vs. an expected gain of 1.5%.
The greenback remains modestly up despite the headlines. Finally, Factory Orders rose in March 1.9%, surpassing the market’s expectations of a 1.5% advance. The US economy is expected to have added 185K new jobs in April, while the unemployment rate is seen steady at 3.8%.
Wages are seen up 0.3% MoM and by 3.3% YoY. Most readings are in-line with April results, although, given the current dollar’s demand, such numbers could exacerbate the dominant bullish trend. The final Markit and official services PMI will also be out this Friday.
EURUSD 4 Hour Chart
The short-term picture is bearish, given that, in the 4 hours chart, the pair fell below its 20 SMA which lost its upward strength while technical indicators entered negative territory, maintaining their bearish slopes. The immediate resistance is set at around 1.1190. If the decline extends below 1.1150, the yearly low at 1.1110 comes as the next possible target, with a weekly close around this last favoring a test of the 1.1000 critical figure next week.
Major Economic Events happening this week (AEST Time Zone)
| Economic event (Date) | Previous | Forecasted | Actual |
| EA- Business Confidence April (29 April) | 0.53 | 0.49 | 0.42 |
| US- Personal Income MoM for March (29 April) | 0.2% | 0.4% | 0.1% |
| US- Personal Spending MoM for Feb (29 April) | 0.2% | 0.4% | 0.1% |
| GB- GFK Consumer Confidence (30 April) | -13 | -12 | -13 |
| CN- NBS Manufacturing PMI for April (30 April) | 50.5 | 50.7 | 50.1 |
| DE- GFK Consumer Confidence for May (30 April) | 10.4 | 10.4 | 10.4 |
| DE- Inflation Rate YoY Prel April (30 April) | 1.3% | 1.5% | 2.0% |
| US- ISM Manufacturing PMI for April (2 May) | 55.3 | 55.0 | 52.8 |
| US- Fed Interest Rate Decision (2 May) | 2.5% | 2.5% | 2.5% |
| GB- BOE Interest Rate Decision (2 May) | 0.75% | 0.75% | 0.75% |
| GB- BOE Quantitative Easing (2 May) | £435B | £435B | £435B |
| US- Non Farm Payroll April (3 May) | 196K | 181K | TBA |
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