Risk aversion increased among market participants on Thursday following ECB and BoE actions. Bank of England expanded its asset purchase program by £50 billion to total £375 billion, while the European Central Bank cut benchmark rates by 0.25% to 0.75%. Both moves were in-line with expectations but nevertheless investors preferred to play safer. As a result the German DAX index closed the session 0.45% lower at 6535.56, while the French CAC 40 lost 1.17% to 3229.36.
U.S. stock also fell following the European bearish sentiment, overshadowing some better than expected economic data. The June Automatic Data Processing (ADP) employment reading showed an increase of 176K jobs from May to June on a seasonally adjusted basis. This was much better than the 100K consensus calls. Meanwhile weekly initial jobless claims reading of 374K was better than the 385K, which was widely expected.
S&P 500 finished the trading day 0.47% lower at 1367.58, while the blue chip Dow Jones Industrial Average dropped 0.36% to 12896.67. NASDAQ Composite remained nearly unchanged at 2976.12.
Today market participants are entirely focused on the U.S. non-farm payrolls data scheduled for 12:30GMT. Economists expect 95k increase in the job creation during June which if happened will be improvement considering Mays’ 69k increase.
EUR/USD
Binary EUR/USD dropped below the psychological 1.24 moving the downside target on crucial bottom at 1.2286. On the upside binary investors should expect first resistance around 1.25, followed by 1.2625. LKey resistance level remains at 1.2746, which is 38.2% fibo retracement of the 1.3486-1.2288 drop.
S&P 500
After the holiday binary options consolidate around 1370. Today first support of remains at 1363 and break below it is expected to drive the index lower to 1335. However, good payrolls results could easily extend the positive move. First resistance is expected in the 1390-1400 area, followed by the crucial top at 1422.
DAX
Binary DAX options fell to 6480, but managed to close the session above 6500. On the positive side first resistance remain around 6600. Break above it will is expected to move the index towards 6720 which is 61.8% Fibonacci retracement of the 7216-5918 drop. On the downside first support is expected at the previous resistance near 6445, followed by 6300.
Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.
