ASIA session review: Dollar up vs. euro, pound ahead of payrolls

Data released (actual, consensus, previous):           

05:00   JP  Leading Economic Index (May)Preliminar    110.5    96.3    107.7

07:15   CH  Consumer Price Index (YoY) (Jun)     -0.1%    -0.4%    -0.5%

The Dollar Index climbed to a five-week high before a U.S. report today that economists said will show companies added enough jobs to lower the unemployment rate, boosting growth prospects for the world’s biggest economy.

The greenback rose toward its strongest in more than a month against the yen and euro amid bets an improving U.S. economy will prompt the Federal Reserve to curb stimulus. The euro and pound slid after European Central Bank President Mario Draghi and Bank of England Governor Mark Carney signaled yesterday they will keep borrowing costs at record lows.

EURO:

European Central Bank President Mario Draghi pledged to keep interest rates at a record low for an “extended period” yesterday.

EUR/USD  under $1.2900. The common  currency dropped the most in almost three weeks versus the yen as Draghi said the ECB’s monetary policy stance will “remain accommodative” for as long as needed to spur growth.

At the moment the pair is at $1.2890 facing the next support at $1.2860 (weekly cloud top) followed by may lows $1.2820.  On the flip side, a break above $1.3030 (high Jul.3) would target $1.3055 (MA100d) en route to $1.3078 (high Jul.2).

POUND:

remains under pressure  after Bank of England chief Mark Carney said increases in market rates weren’t warranted.d is also expected on Thursday to leave its lending rate unchanged, at a record low 0.5%.

GBP/USD fall off the bottom of the $1.5100/$1.5325 range. A break below $1.5050/60 opens up previos territory and June lows $1.5005, ahead of $1.4980.

Resistances to the top side within the range come as $1.5285, $1.5305/10, $1.5350 and $1.5375.

YEN:

The yen extend losses versus the dollar.

USD/JPY holds a bit above Y100 with resistance remains at Y100.45/50. Break above will target Y101.20.  Initial support is around daily lows on Y99.20. Below Y98.80 support comes at Y97.20, with a break under targets last Friday’s lows near Y96.90.

DATA AHEAD:

In Canada and US main attention will be on Jun Employment data at 12:30 GMT. US Nonfarm Payrolls are expected at 170K after 175K with Unemployment Rate down to 7.5% versus 7.6%.

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