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Weak ADP Report raises beats for Friday’s NFP Report

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The USD was traded mixed against its G10 counterparts during the European morning Wednesday, with little news pushes the prices either way and ahead of tomorrow’s all important Non-farm Payrolls report. The buck was higher against the EUR, GBP, AUD and SEK while it was lower against the CAD, JPY, CHF, NZD and NOK.

The US data released yesterday was generally pessimistic. The ADP Employment Change for March came out, was downbeat for the Non-Farm Payrolls report scheduled to be published on Friday. ADP Employment showed an increase of 189,000 jobs in the private sector, missing the market expectations to show an increase of 225,000 jobs. The indicator is lower than 200k for the first time since January 2014, which raises the concerns among the investors. A weak NFP number on Friday, the number of jobs added in both the public and private sector, may put on hold the interest rate hike was forecasted to come earlier. A breakout cannot be too far away now with some important data coming out from the US, on Friday, including the all-important Non-farm Payrolls report, even though markets are closed in observance of Good Friday.

The US ISM Manufacturing PMI for March came out 51.5 lower than expectations of 51.5 from 52.9 before. The Construction Spending was also lower than anticipated in February but improved from the previous release.

The Markit Manufacturing PMIs for Germany, United Kingdom, Italy, France, Greece, Spain and Eurozone as a whole came out yesterday. All of them have increased in March. The shared currency remains under pressure since Greece has failed to reach a deal with the lenders and is running out of cash.

The EURUSD pair recovered somewhat from yesterday’s opening levels and it is moving above the 1.0770 level. The pair is finding support from the 1.0700 level and resistance from the 200-period SMA around the 1.1040 level and the 1.0920 barrier. If the bulls manage to maintain the price above the psychological level of 1.0700, I would expect extensions towards the 1.0920 region.

The GBPUSD pair is moving inside a downward sloping channel, with the bulls struggling to break above both, the 1.4870 and the 1.4990 levels. The former is a significant level since it includes the 50-period SMA, as well as the upper boundary of the formation. A decisive break above that level would be the first warning of further advance, prompting a more aggressive move towards the 1.4990 level.

Gold soared yesterday, trading near the three-week high level reached last week. The yellow metal has been in a downtrend since mid-January 2015, when it bounced back up to retrace 38.2% of the downleg from $1,300 high to $1,142 low. Silver also surged after rebounding from the 16.50 level and the 200-period SMA on the 4-hour chart.

Today, investors will be interested in the US weekly report on unemployment benefits claims. Both Indicators are upbeat the last four weeks. Factory Orders are expected to have slowed in March by -0.5% from -0.2%, on a monthly basis. Furthermore, European Central Bank will release the Monetary Policy Meeting Accounts.

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