Risk-on due to potential US-China trade agreement

Daily Analysis - 02/11/2018

US-China trade war news reinforced JPY

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The newest releases about the ongoing US-China trade resolve reinforced the desire for the risk assets in the Asian trading session on the today giving the Asian assets momentum to reach the top and the greenback broadly lower. As a result, FX today encouraged the risk-on market activity, with the AUD coming back to the 0.7248 area as the Kiwi bounces quickly to test the 0.66 level. On the other hand, Yen the popular safe-haven currency moved into new offers that drove the USD/JPY back onto the 113 level while the Treasury yields pulled up bids, surging nearly 1% across the curve. In the Meantime, the EUR and GBP consolidated yesterday’s rally, while markets watch forward key US payrolls data and any new Brexit progress.

United States Non-Farm Payrolls


NFP in the US rose by 134 Thousand in last month of 2018, continuing the upwardly updated 270. Thousand in summer and went beneath market expectations of 185 Thousand. It is the weakest reading in a year following the devastating Hurricane Florence that hit the Carolinas in the middle of September true weighing on payrolls. Job increases appeared in health care in professional services in business services in transportation and warehousing. Non-Farm Payrolls in the United States averaged 126.93 Thousand from 1939 until 2018, touching an all-time high of 1115 Thousand in September of 1983 according to trading economics website data.

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EURUSD is on the move due to NFP


The popular EUR has a limited change to the bullish side at about 1.1419 following a break out from the descending trend yesterday. The Eurozone PMI is expected later on today with a significant event in the US non-farm payroll release with market concentrating on both wage increase and title NFP data. The EURUSD rose about 50 pips today morning in anticipation of the release of NFP. It rose above the 50,100 EMAs and it looks that the price didn’t finish its bullish appetite.

Normally the EURUSD moves between 50-100 during the NFP so expect volatility to catchup during the time of the popular event.

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GBPUSD is holding its gains


GBPUSD is holding its gains above the1.3000 level following some minor losses at the beginning of the day and the next key area will be the 100-day MA at about 1.3040. The greenback is once more fighting during the session and is falling to new lows versus some major competitor the pound, euro, and loonie.

Now, this results in that GBPUSD came back up above 1.3000 and buyers probably will be watching to test the key resistance level above. If price breaks above that level the bearish momentum in the pair will turn more week instead.

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