Dollar steady before jobs data

The dollar is broadly unchanged as dealers set their attention to the non-farm payrolls report at lunchtime.

People sat around a table at a jobs fair
Source: Bloomberg

Euro higher after Greece defers

EUR/USD is up on the day after Greece decided last night to delay its repayment until the end of the month, and it will consolidate it into one large repayment. This is a classic case of Greece kicking the can down the road, and if the indebted nation is finding it difficult to make one repayment how will it manage several all in one go?

EUR/USD has reacted well to the news but the situation will rear its ugly head again in a few weeks.

The non-farm payrolls at 1pm (London time) will be the focus of the trading session, and the market is expecting 226,000 jobs to have been added in May, and for the unemployment rate to remain at 5.4%. Both the ADP employment and initial jobless claims showed an improvement in the US jobs numbers, and this is an important factor in the Federal Reserve’s decision over interest rates.

EUR/USD has been gaining ground since the end of last month, and now that Greece is on the back burner, there is little to hold it back. The $1.12 level is acting as support, and if this mark is held the resistance at $1.14 will remain the target. Should $1.12 be punctured, the next level of support down will be $1.10.

Spot FX EUR/USD chart

Sterling slips ahead of US jobs report

GBP/USD is a touch lower today as traders await the US job report. The pound has been in a downward trend versus the dollar since the middle of last month, and this was during a period of relatively soft US economic data. Traders are starting to question if the Fed will increase rates in September, and there are more dealers looking towards the back end of this year or even 2016. The US is still ahead of the UK in the interest rate race and that will keep GBP/USD in its downward trend.

The $1.52 mark is the initial target to the downside, and if that level is taken out the next support level will be found at $1.50. The 200-day moving average will act as a barrier to an upside move at $1.5370, and a move through it will bring $1.55 into play.

Spot FX GBP/USD chart

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