Daily Forex Analysis - 5th August 2021

USD Overview (05 August 2021)

Yesterday, USD strengthened against most major currencies except NZD.

The ADP Non-Farm Employment Change data (Actual: 330K, Forecast: 645K, Previous: 680K revised from 692K) released yesterday indicated a strong slowdown in jobs creation in July likely due to the concern over the spreading of the COVID Delta variant.

The ISM Services PMI data (Actual: 64.1, Forecast: 60.5, Previous: 60.1) released yesterday indicated the fastest pace in the rate of expansion of the services sector in 15 years.

During his speech yesterday, FOMC committee member Clarida said that he expects the central bank to announce quantitative easing (QE) tapering later this year and will be supporting its announcement.

In an interview, FOMC committee member Kaplan said that he supports the idea of tapering QE soon as long as the jobs report for the months of July and August are showing progress.

FOMC committee member Waller will be speaking later at 2200 (GMT+8). During this time, there may be volatility in USD.

NZD/USD Outlook (05 August 2021)

Overall, NZD/USD is ranging across. Recently, NZD/USD weakened and rejected the resistance zone of 0.71000 after the hawkish remarks on QE tapering sent out by FOMC committee members.

NZD/USDs next support zone is at 0.69500 and the next resistance zone is at 0.71000.

Look for short-term selling opportunities of NZD/USD.

AUD/USD Outlook (05 August 2021)

Overall, AUD/USD is trending downwards. Recently, AUD/USD weakened and broke below the key level of 0.74 after the hawkish remarks on QE tapering sent out by FOMC committee members.

The Australian Retail Sales m/m data (Actual: -1.8%, Forecast: -1.8%, Previous: -1.8%) released yesterday indicated continued decline in consumer spending in June.

Reserve Bank of Australia (RBA) Governor Lowe will be testifying before the House of Representatives Standing Committee on Economics tomorrow at 0700 (GMT+8). During this time, there may be volatility in AUD.

The RBA will be releasing their quarterly monetary policy statement tomorrow at 0930 (GMT+8).

AUD/USDs next support zone is at 0.73300 and the next resistance zone is at 0.75000.

Look for short-term selling opportunities of AUD/USD.

USD/JPY Outlook (05 August 2021)

Overall, USD/JPY is trending downwards. Recently, USD/JPY strengthened and broke above the key level of 109 after the hawkish remarks on QE tapering sent out by FOMC committee members.

USD/JPYs next support zone is at 108.500 and the next resistance zone is at 110.800.

Look for short-term buying opportunities of USD/JPY.

EUR/USD Outlook (05 August 2021)

Overall, EUR/USD is ranging across. Recently, EUR/USD weakened and bounced down from the key level of 1.19 after the hawkish remarks on QE tapering sent out by FOMC committee members.

The eurozone Retail Sale m/m data (Actual: 1.5%, Forecast: 1.6%, Previous: 4.1% revised from 4.6%) released yesterday indicated a strong slowdown in consumer spending in June.

Currently, EUR/USD is moving towards the support zone of 1.18200 and the next resistance zone is at 1.20000.

Look for short-term selling opportunities of EUR/USD if it breaks the support zone of 1.18200.

GBP/USD Outlook (05 August 2021)

Overall, GBP/USD is ranging across. Recently, GBP/USD weakened after the hawkish remarks on QE tapering sent out by FOMC committee members.

The UK Construction PMI data (Forecast: 64.5, Previous: 66.3) will be released later at 1630 (GMT+8).

The Bank of England (BoE) will be announcing their monetary policy decision later at 1900 (GMT+8). It is expected that the central bank will be holding its monetary policy unchanged. Also, it is unlikely that the BoE will providing any details on quantitative easing (QE) tapering due to existing uncertainties arising from the COVID Delta variant, slowdown in business activities and the ending of the UK furlough scheme in September. The central bank will also be releasing its quarterly projection materials in which it is likely to revise its inflation projection upwards.

Currently, GBP/USD is testing to break below the key level of 1.39. Its next support zone is at 1.38000 and the next resistance zone is at 1.40000.

If the BoE does not provide any details on QE tapering and fails send out any hawkish tone, look for short-term selling opportunities of GBP/USD if it breaks below the key level of 1.39.

USD/CAD Outlook (05 August 2021)

Overall, USD/CAD is ranging across.

The Canadian Building Permits m/m data (Actual: 6.9%, Forecast: 6.0%, Previous: -12.9% revised from -14.8%) released yesterday indicated an increase in the number of building approvals issued in June.

USD/CADs next support zone is at 1.24500 and the next resistance zone is at 1.26100.

Look for short-term buying opportunities of USD/CAD.

GBP/JPY Outlook (05 August 2021)

Overall, GBP/JPY is ranging across.

The UK Construction PMI data (Forecast: 64.5, Previous: 66.3) will be released later at 1630 (GMT+8).

The Bank of England (BoE) will be announcing their monetary policy decision later at 1900 (GMT+8). It is expected that the central bank will be holding its monetary policy unchanged. Also, it is unlikely that the BoE will providing any details on quantitative easing (QE) tapering due to existing uncertainties arising from the COVID Delta variant, slowdown in business activities and the ending of the UK furlough scheme in September. The central bank will also be releasing its quarterly projection materials in which it is likely to revise its inflation projection upwards.

Currently, GBP/JPY is testing to break above the key level of 152. Its next support zone is at 151.000 and the next resistance zone is at 153.800.

If the BoE does not provide any details on QE tapering and fails send out any hawkish tone, look for short-term selling opportunities of GBP/JPY.

EUR/JPY Outlook (05 August 2021)

Overall, EUR/JPY is trending downwards.

The eurozone Retail Sale m/m data (Actual: 1.5%, Forecast: 1.6%, Previous: 4.1% revised from 4.6%) released yesterday indicated a strong slowdown in consumer spending in June.

Currently, EUR/JPY is moving towards the resistance zone of 130.000 and the next support zone is at 128.500.

Look for short-term selling opportunities of EUR/JPY if it bounces off the resistance zone of 130.000.