Weekly Analysis (DEC 2, 2019)

Traders look to key US and EU macroeconomic data points

During the upcoming trading week market participants look to a host of important economic data releases from the US and eurozone economies. The Nonfarm payroll job report headlines the economic docket, with most economists expecting that the United States economy created just under 90,000 new jobs during the month of November. The eurozone economy is also in focus, with the release of EU and German PMI data and the official EU monthly Unemployment Rate and Retail Sales figures.

Other highlights on the economic calendar this week include the Reserve Bank of Australia and Bank of Canada interest rate decisions, with both the RBA and BOC widely, tipped to keep rates on-hold.

Monday 2nd December, EU Manufacturing PMI

The EU Manufacturing Purchasing Managers Index is released by Markit Economics and measures the activity level of purchasing managers in the manufacturing sector. The manufacturing PMI is an important indicator of business conditions and the overall economic condition in the eurozone because the manufacturing sector represents nearly a quarter of total GDP. A reading above 50 indicates expansion in the sector and below 50 indicates contraction.

  • The EURUSD pair is only bearish while trading below the 1.1020 level, key support is found at the 1.0980 and 1.0945 levels.
  • If the EURUSD pair trades above the 1.1020 level, buyers will likely test towards the 1.1070 and 1.1130 resistance levels.

Tuesday 3rd December, AUD, RBA Rate Decision

The Reserve Bank of Australia Rate Decision is the market interest rate on overnight funds, with the RBA standing as the central monetary authority for the Australian economy. The Reserve Bank of Australia is widely expected to keep interest rates on hold at this meeting, following recent rate cuts. RBA policymakers are also tipped to strike an overall dovish tone towards the economy and monetary policy.

  • The AUDUSD pair is bearish while trading below the 0.6800 level, key support is found at the 0.6750 and 0.6680 levels.
  • If the AUDUSD pair moves above the 0.6800 level, buyers may test towards the 0.6880 and 0.6940 levels.

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Wednesday 4th December, USD US Private Sector Jobs

The ADP Private Sector employment change jobs report is released by the US Automatic Data Processing Inc and measures the change in the number of people employed inside the American private sector. A rise of this figure is seen as positive and good for stimulating US economic growth, while a weaker-than-expected number is seen as bearish and a possible indicator for future economic weakness.

  • The USDCHF pair is only bearish while trading below the 0.9970 level, further downside towards the 0.9910 and 0.9840 support levels seems possible.
  • If the USDCHF pair trades above the 0.9970 level, buyers are likely to test towards the 1.0050 and 1.0090 resistance levels.

Thursday 5th December, EU Retail Sales

EU Retail Sales measures the sum of goods and services sold monthly at eurozone retail outlets. The report is also considered a measurement of consumption and consumer confidence. Consumer confidence and economic growth signal an increasing number of sales which would fuel the eurozone economy. The changes are widely followed as an indicator of consumer spending and the leading indicator of the health of the EU economy.

  • The EURGBP pair is only bullish while trading above the 0.8555 level, further gains towards 0.8610 and 0.8710 levels remain likely.
  • If the EURGBP pair trades below the 0.8550 level, sellers may test towards the 0.8350 and 0.8300 support levels.

Friday 6th December, US Nonfarm Payrolls Job Report

The NFP job report shows the monthly change in employment in the American economy, excluding the farming sector. The Non-farm payroll job report is the most carefully observed indicator in the employment situation inside the United States. It is considered the most inclusive calculation of job creation, which causes the Nonfarm Payrolls Job report to become highly significant to market participants, due to the great importance of labour in the United States economy.

  • The USDJPY pair is bearish while trading below the 109.00 level, further losses towards the 108.50 and 107.50 levels remains possible.
  • If the USDJPY pair trades above the 109.00 level, buyers are likely to test the 109.60 and 110.00 resistance levels.

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