News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/hymrumanUY
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfs2Iz https://t.co/6dAqxsVfxJ
  • The results of this weekend’s German Federal Election will likely dominate Euro sentiment at the start of the week ahead but after a possible EUR/USD bounce they will have little long-term impact. Get your weekly $EUR forecast from @MartinSEssex here: https://t.co/Xu3ZT7EtrW https://t.co/5VHKn52MaA
  • The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies to give a timely glimpse into current growth and inflation levels. Learn how to better understand CPI here: https://t.co/nAa0fHq4Np https://t.co/mf9rsmIvaW
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/mYWO0Eta0P
  • Sterling continues to contract into trend extremes and the focus is on a pending breakout in the weeks ahead. Get your weekly $GBP technical forecast from @MBForex here: https://t.co/ZvEMQuFjSs https://t.co/rMmq9cehnY
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sZLTs https://t.co/tm4k3IVzHr
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/FFMy5O9YoY
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/jZHcyAZ5SU
  • Further your forex knowledge and gain insights from our expert analysts on EUR with our free guide, available today: https://t.co/XtydfV5wS6 https://t.co/Iw9haaHAnn
Preview for July NFPs & Strategy Outlook for USD-pairs

Preview for July NFPs & Strategy Outlook for USD-pairs

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- The DXY Index is sitting near its yearly lows ahead of the July NFP report.

- Data today will either provoke another downdraft in the greenback, or could prove to be the stabilizing force the US Dollar desperately needs.

- The retail trading crowd remains net-long the US Dollar, even as positioning has narrowed over the past week.

Join us today at 8:15 EDT/12:15 GMT for live coverage of the July US Nonfarm Payrolls report in the DailyFX Live Trading Room - register here.

The key issue surrounding today's July US Nonfarm Payrolls report is whether or not the US labor market is improving enough to reduce labor market slack and push up wage growth (which should help inflation), in order to justify the Federal Reserve hiking rates again before the end of of 2017.

As it stands today, markets don't think another hike is coming: Fed funds futures are pricing in March 2018 as the most likely period for the next move. Market participants will be paying attention to the wage component of the report in particular, which has been admittedly lacking gusto despite the unemployment rate holding near the Fed's defintion of "full employment" (at 5% or lower) since for October 2015.

Current expectations for today's data remain are modest after disappointing ADP and ISM Services figures earlier in the week, with the unemployment rate expected to drop to 4.3%, and the headline jobs figure to come in at +180K. Wage growth is due in around +2.5% y/y. Using a 10-year rolling model, the ADP report and the ISM Services report can account for 91% of the changes in the NFP figure (R^2 = 0.91). In sum, these proximal trackers of the US labor market correspond with pace of jobs growth between +155 to +180K.

The big picture: so long as it comes in above +75K to +125K, the jobs data will be good enough to keep the economy on track to maintain the unemployment rate (U3) at 4.3% through the end of 2017 (as per Fed Chair Janet Yellen's commentary at the end of February). The Atlanta Fed Jobs Calculator shows that the US economy needs to add +115K jobs each month for the rest of 2017 to maintain the unemployment rate at 4.3%.

Chart 1: USD/JPY Daily Timeframe (March to August 2017)

Preview for July NFPs & Strategy Outlook for USD-pairs

The timing of the US NFP report couldn't be more important for the US Dollar, especially now that US yields have started to turn lower again. Failure to meet expectations today could easily yield another swing lower in US yields, which would surely send USD/JPY tumbling below key support upon which it currently rests: the trendline from the April and June 2017 swing lows. The key line in the sand today is 110.15: if above, USD/JPY may have room to stabilize going forward.

Read more: Did BOE Just Mark the Top in GBP-crosses? JPY in Focus

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES