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FOREX: Markets in Holding Pattern Before US Jobs Report, G20 Outcome

By , Currency Strategist
04 November 2011 06:33 GMT

Talking Points

  • US Dollar Cautiously Rebounds Overnight, All Eyes on Employment Data
  • G20 to Announce Cannes Summit Outcome as Greece Holds Confidence Vote
  • S&P 500 Stock Futures Flat, Pointing to Indecision Across Financial Markets

The US Dollar corrected narrowly higher in overnight trade after posting its largest decline in 5 days over the preceding 24 hours, adding as much as 0.2 percent against its leading counterparts. All eyes are now on the US Employment figures, with expectations calling for the economy to add 95,000 jobs in October.

The result would mark a narrow slowdown in hiring from the preceding month, and coupled with disappointing ISM manufacturing- and service-sector readings reported earlier this week may rekindle worries about the fragile US recovery. However, it remains to be seen whether such an outcome proves negative for risk appetite given its ominous implications for global growth at large or positive in that it bolsters the case for additional stimulus from the Federal Reserve (particularly after Ben Bernanke made clear that all options are on the table earlier in the week).

Meanwhile, the outcome of the G20 summit in Cannes is set to be unveiled at 13:15 GMT, with markets looking for guidance on the international consensus on working through the Euro Zone debt crisis after a tumultuous week of political posturing. Greece once again threatens to spoil confidence-building as it holds a confidence vote that may conceivably dismantle the administration of Prime Minister George Papandreou, creating a power vacuum at the worst possible time.

However, coalition-building efforts are underway and if a unity government is successfully established, the confidence vote will be rendered essentially meaningless while stoking optimism in the ability of the administration in Athens to pass austerity measures and secure EU/IMF aid disbursement. As it stands, S&P 500 stock index futures are trading flat ahead of the opening bell in Europe, hinting traders are unwilling to commit to a directional bias until headline event risk passes.

Asia Session: What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

0:30

AUD

RBA Quarterly Monetary Policy Statement

-

-

-

Euro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

7:55

EUR

German PMI Services (OCT F)

52.1

52.1

Medium

8:00

CHF

Foreign Currency Reserves (OCT)

-

282.4B

Low

8:45

EUR

Italian PMI Services (OCT)

45.5

45.8

Low

8:50

EUR

French PMI Services (OCT F)

46

46

Low

9:00

EUR

Euro-Zone PMI Composite (OCT F)

47.2

47.2

Medium

9:00

EUR

Euro-Zone PMI Services (OCT F)

47.2

47.2

Medium

10:00

EUR

Euro-Zone Producer Price Index (MoM) (SEP)

0.2%

-0.1%

Low

10:00

EUR

Euro-Zone Producer Price Index (YoY) (SEP)

5.8%

5.9%

Medium

11:00

EUR

German Factory Orders n.s.a. (YoY) (SEP)

7.5%

3.9%

Medium

11:00

EUR

German Factory Orders s.a. (MoM) (SEP)

0.1%

-1.4%

Medium

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.3702

1.3900

GBPUSD

1.5925

1.6110

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com

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04 November 2011 06:33 GMT