Demand for the US Dollar remained low on Thursday, but there is high probability that the recent wave of selling will be over soon. On Friday markets will focus on a block of the US labor market figures. According to the official forecast, the US economy added 189K new jobs in January (below 292K in December, but still enough for a Fed’s rate hike in March). You should also pay attention to the average hourly earnings (forecast – upbeat).
EUR/USD surged above 1.1200, but you may see from the RSI indicator that the pair is overbought. Selling at current levels seems to be an attractive idea. Note that the pair broke above the 55-week MA, but this level acted as a resistance for a couple of times. Will the bulls be strong enough to close the weekly candle higher? Support is seen at 1.1050/00. Watch the German factory orders on Friday.
GBP/USD remains highly volatile. On Thursday, the market was disappointed by the BOE meeting results – this time 9 out of 9 BOE members voted to leave rates unchanged. Chances for a BOE rate hike in 2016 remain very low. Watch the 1.4530 support (38.2% Fibonacci from the recent decline).
AUD/USD extends the upside. On Wednesday we’ve seen a strong bullish candle on the daily chart. However, any decline in risk appetite will hurt your ling positions badly – the buying positions are overstretched. Tomorrow watch the RBA monetary policy statement and the Australian retail sales figures.
USD/JPY keeps on declining. The pair is forming a bullish engulfing on a weekly chart. Key support is seen at 116 yen – this is a psychological level where the BOJ is expected to intervene.