A US dollar dominated day

Finally a data packed day to help with the tight ranges being seen of late. USD will dominate the headlines today with ADP employment data first up, expected to drop to 230k from the previous 281k. This data is often used to determine the outcome of the non-farm payroll figures which are due out this Friday, currently forecast to be 230k. We could see some revisions to this data if ADP surprises on either side.

The US economy is set to regain some muscle in the second quarter, with the advanced GDP data for the second quarter. Notably the one with the most impact due to it being the first of three readings. The expected figure is 3.1%, up from the previous 2.9%. I think this will take centre stage for early data out of the US, but if ADP and GDP are better than expected, the USD will continue its rally by passing the seven-week highs at which it is currently.

After all the data mentioned, tonight the FOMC will release its statement and the bond buy backs. With not much expected to change here it is still a very positive USD day. Expected bond buys to continue on course in light of recent strong US data, also the key to tonight will be where Yellen stands on rate rises, with mid-2015 looking to be the best bet but any clues or positive remarks will give the USD a firm push higher.

It is worth noting that German CPI is due out today. With all the surrounding issues in the eurozone around the inflation issue, the largest economy in Europe reports how it is doing. CPI is expected at 0.2%, a drop from the previous reading, If it comes in at this figure, this will not help the euro today in light of strong data expected to come out of the US.

EUR/USD is currently just holding above the 1.3400 level, which hasn’t been broken since November 2013. It is looking very fragile, with what is expected out today.

EUR/USD

Supports 1.3400 1.3375 1.3295 | Resistance 1.3450 1.3485 1.3510

USD/JPY

Supports 101.70 101.25 101.00 | Resistance 102.25 102.50 102.85

GBP/USD

Supports 1.6930 1.6880 1.6850 | Resistance 1.6985 1.7000 1.7040