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💱 FX Market Shaken Ahead of U.S. Jobs Data | ISM Uptick & Sterling Selloff in Focus

💱 FX Market Shaken Ahead of U.S. Jobs Data | ISM Uptick & Sterling Selloff in Focus

🌍 Global Market Environment

  • U.S. and Canadian markets were closed yesterday for Labor Day; liquidity was thin.

  • This week’s focus is squarely on Friday’s U.S. Nonfarm Payrolls (NFP).

  • The last NFP shocked markets with major downward revisions, cementing expectations for a 25bp September rate cut.

  • If this week’s report is even weaker, markets may start to price in a 50bp cut.

U.S. Data Calendar (key releases ahead of NFP):

  • Sep 3: JOLTs Job Openings, Factory Orders

  • Sep 4: ADP Employment, ISM Services, Weekly Jobless Claims

  • Sep 5: Nonfarm Payrolls (NFP)

📊 Today’s Key Indicators

  • U.S. ISM Manufacturing PMI (Aug): Expected 49.0 (vs. 48.0 prior). Still in contraction, but any improvement could support the dollar.

  • Eurozone CPI Flash (Aug): Headline +2.1% y/y, Core +2.2% y/y expected.

    • ECB meeting (Sep 11) → on hold is consensus. A CPI upside surprise could offer the euro temporary support.

💵 FX Market Moves

  • Tokyo Session

    • BoJ Deputy Gov. Himino’s cautious tone → yen selling.

    • Solid 10-year JGB auction lowered yields, adding yen pressure.

    • USD/JPY climbed into the 148 handle.

  • London Open

    • Broad-based dollar buying, with sterling leading the decline.

    • U.K. gilt yields surged, fiscal concerns sparked sharp pound selling.

    Key moves:

    • GBP/USD: fell 1.3530 → 1.3439

    • EUR/USD: broke below 1.1700 → hit 1.1671

    • USD/JPY: rallied to 148.53

    • U.S. 10y yields: 4.24% → 4.27%

📊 Major FX Pairs | Ranges & Strategy Scenarios

Pair Expected Range Short-Term Scenario Medium-Term Scenario
USD/JPY 147.00 – 148.80 Buying interest below 147.30; profit-taking above 148.50 Weak NFP → break under 146.00; strong NFP → retest 150.00
EUR/USD 1.1650 – 1.1750 Selling into rallies; heavy resistance near 1.1700+ Weak NFP → test 1.1800; strong NFP → risk of 1.1600 break
GBP/USD 1.3430 – 1.3550 Fiscal concerns cap gains; selling pressure above 1.3500 U.K. weakness could extend losses; sub-1.3400 opens deeper downtrend
EUR/JPY 171.50 – 173.00 Bearish bias under 172.00; 173.00 acts as resistance Euro weakness could drag toward 170.00; broad USD weakness could lift to 174.00
GBP/JPY 198.00 – 200.00 Selling pressure around 199.00; dip-buying near 197.50 200.00 seen as a ceiling; fiscal risks limit upside sustainability

✅ Key Takeaways

  • USD/JPY: Trading heavy at 148.50; ultimate direction tied to Friday’s NFP.

  • EUR/USD: ECB rate-cut expectations cap rallies; 1.1600 is the key defense.

  • GBP/USD & GBP/JPY: Fiscal risk weighs, 200.00 in GBP/JPY is a ceiling.

  • Cross-yen: Driven largely by dollar moves; risk-on equities can add yen selling flows.

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