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All eyes on ADP Employment today

Market Analysis

NZUSD, Daily

This week markets were facing a backdrop of investor caution ahead of the Friday’s U.S. jobs report and next week’s policy announcement form the Fed. As Yellen, implied, we’re going to get a hike in March unless the data fail to move in line with expectations. Therefore, all eyes have been riveted on Friday’s February jobs report, which would have to severely miss in order to prevent the FOMC from pulling the trigger on the 15th. And that seems very unlikely after the 44-year low in initial jobless claims last week, further anecdotal jobs data likely to be duly firm and inflation on the rise.

Today however after the lack of any major market motivation the last two days, market seems to move away from the up to now sideline behaviour and to focus on US ADP Employment Change and Nonfarm Productivity. February ADP Employment report expected to post a solid 190k gain for the month but below the January figure of 246k. Also, a 190k February nonfarm payroll increase expected to beat the 156k December headline, but to fall short of the 227k January rise, with a 220k private payroll gain. The report faces upside risk from rising producer sentiment and consumer confidence, 44-year lows in initial claims, a surging stock market, and a solid ADP surge.

Hence due to the anticipation for the upcoming data, the dollar has been mixed, posting a three-session high versus the euro, which was aided by a big miss in German manufacturing orders data, gaining on the still-under-performing pound, holding steady versus the yen, and losing ground to the Australian dollar, which was bid following an upbeat statement from the RBA as it delivered an expected unchanged policy decision.

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EURUSD edged out a new four-session low at 1.0558. AUDUSD drifted moderately lower, giving back most of the gains seen yesterday following the RBA’s post-policy meeting statement. NZDUSD seems to behaving weak as well, presenting a bearish trend since early February. It is moving below the significant 200 EMA since last Thursday. Daily RSI is oversold at 27, while Parabolic SAR remains negative.

Aussie logged a low at 0.7584, which nearly matched trend support draw from last week’s lows. The pair now faces further pressure, by breaking the lower Bollinger bands pattern, in the hourly chart. Its 4-hour RSI is bearish and sloping lower at 33, while MACD remains in negative territory. Hence further weakness is possible to be noticed until data are out later today.

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Andria Pichidi

Market Analyst

HotForex

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