The market focusing has been shifted to the US labor report of August which will be released today from the ECB's yesterday awaited decision of buying bonds which came with expected germane criticism too. The single currency rose yesterday after announcing the decision of having the interest rate unchanged at 0.75% but after receiving the decision of releasing unlimited buying bonds plan from the secondary market in an unlimited way during the consequent press conference, the single currency came under the pressure which eased back again brining the single currency again to be traded above 1.26 versus the greenback waiting for today US labor market data which will be closely watched by the markets to have new clues about the US labor market which always takes the care of the Fed which came under a lighter pressure to decide a new QE3 soon following last US non-farm payrolls release of July improved to 163k in July from 64k in June underpinning the greenback.

But anyway now the USD is under pressure as the market sentiment has been shifted from discounting an easing action by the Fed, if the US economy to deteriorate further to such an action from the Fed, if it is not to improve soon since the release of the minutes of the Fed's last meeting in august which can suggest that having non-farm payrolls numbers again below 100k in August as what have been in the previous 3 months to July can warrant a new action by the Fed instead soon of waiting for having negative numbers again as most expectations were referring by these minutes.

God willing, the US labor report of August is expected to show declining of the non-farm payrolls of to 125k with stable unemployment rate at 8.3% as it was in July while the existing cheeriness of having better data are still underpinning the equities markets following this week release of US ADP Employment change of August which rose to 201k from 173k while the consensus was referring to 140k.

By God's will, The single currency is expected to meet resistance again at 1.265 versus the greenback whereas it failed to surpass yesterday and also by the end of last week when it was satisfied by reaching 1.2636 and a continuation of this rising can be met by another resisting level at 1.2693 before 1.2748 which has been reached after the recent parliament elections in Greece in last June while easing down back again can be met with supporting levels at 1.2464, 1.24., 1.2241, 1.2134 before 1.2042 which could stave off the pair falling last month and in the case of falling below it, this can open the way for testing 1.20 psychological level which can be followed by reaching 1.1876 again whereas the pair has rebounded forming its bottom on 7th of June 2010

Kind Regards

FX Market Strategist

Walid Salah El Din