Greenback falls after disappointing NFP data

The price of crude oil declined after Iran announced that it had stopped all of its commitments under the 2015 nuclear deal. In a statement to EU’s chief foreign policy official, Iran’s foreign affairs minister, Javad Zarif said that the country had not abandoned the deal. Instead, it was using a dispute resolution mechanism that is contained in the nuclear deal. The decision came more than one year after the United States abandoned the nuclear deal. He also said that Iran was prepared to recommit to the deal if all signatories met their commitments. 

More signs of the weakening of the German economy were revealed today after the country released the industrial production data for July. In the month, industrial production declined by -0.6% after contracting by -1.1% in June. Investors were expecting the industrial production data to jump by 0.4%. Meanwhile, in the European Union, the economy expanded by an annualized rate of 1.2%, which was slightly lower than the first quarter’s growth of 1.3%. On a QoQ basis, the economy expanded by 0.2%, which was slightly lower than the previous growth of 0.4%. In the quarter, the employment change increased by 1.2%, which was higher than the previous 1.4%.

The euro rose slightly after US wage growth decelerated. According to the Bureau of Labor Statistics, the economy added just 130k jobs in August. This was 30k less than what investors were expecting. It was also lower than the previous month’s 159k. The private nonfarm payrolls increased by 96k, which was lower than the expected 150k. The U6 unemployment rate increased to 7.2% from the previous 7.0% while the overall unemployment rate remained at 3.7%. In August, the average hourly earnings rose by 3.2% and on a MoM rate of 0.4%. Meanwhile, in Canada, the unemployment rate remained at 5.7% while the participation rate increased to 65.8%. The economy added more than 81.1k, which was higher than the expected 18.9k.

EUR/GBP

The EUR/GBP pair rose slightly after better-than-expected data from the EU. The pair is now trading at 0.8967, which is slightly higher than the intraday low of 0.8940. This was the first gain in a few days. This week, the pair has declined from a high of 0.9322 to a low of 0.8940. On the four-hour chart, this price is slightly below the 23.6% Fibonacci Retracement level. It is also slightly below the 14-day and 28-day moving averages. The pair will likely resume the downward trend as it aims to reach the previous low of 0.8890. 

GBP/CHF

The GBP/CHF pair has been on a strong upward trend since August 12. Since then, the pair has risen to a high of 1.2195, which was reached today. On the four-hour chart, the price is trading above the 14-day and 28-day moving averages. The price is also along the 61.8% Fibonacci Retracement level. The momentum indicator and the ADX have continued to rise too. The pair is likely to continue moving in the upward trend.

EUR/USD

The EUR/USD pair rose slightly after the disappointing US jobs numbers. The pair rose from the intraday low of 1.1020 to the current level of 1.1040. On the 30-minute chart, this price is slightly lower than the upper line of the Bollinger Bands. The RSI has soared to almost the overbought level of 70. The momentum indicator is at the current level of 100. The pair is likely to remain along these levels ahead of the Fed chair statement later today.