By FXEmpire.com

Analysis and Recommendations:

The EUR/USD continued to decline in today’s session. The pair is currently trading at 1.3152. The euro saw a high of 1.3242 and dropped as low as 1.3122.

The day was mostly about negative sentiment and who out did whom. Every eco report today either just made forecast but still showed weakness or was under forecast. German manufacturing PMI and German Unemployment both surprised markets with disturbing data with unemployment climbing to 6.8%. PMI throughout the eurozone reported below forecast and across the Atlantic the US had some worrying job numbers from ADP.

Private-sector employment increased 119,000 in April, the lowest result since September, led by the service-providing sector and small and medium businesses, according to ADP. The April gain is down from average monthly employment increases of about 200,000 in the first quarter of 2012, according to ADP. Lately, the ADP report has not been accurate, as ADP only reports on those companies that use ADP for their payroll processing. Many companies do not use ADP and many small businesses do not, so the figure does not always accurately depict the market. It is just an indicator ahead of Fridays, Non Farms Payroll report. The ADP report has been an unreliable indicator over the last few months.

The USD continues to gain on the back of the earlier ISM report that showed manufacturing expansion in the US. The USD shook off the ADP report as markets will wait for the official data on Friday.

Economic Reports for May 2, 2012 actual v. forecast

CNY

Chinese HSBC Manufacturing PMI

49.30

49.10

CHF

SVME PMI

46.9

50.5

51.1

EUR

French Manufacturing PMI

46.9

47.3

47.3

EUR

German Manufacturing PMI

46.2

46.4

46.3

EUR

German Unemployment Rate

6.8%

6.7%

6.8%

EUR

German Unemployment Change

19K

-10K

-18K

EUR

Manufacturing PMI

45.9

46.0

46.0

EUR

Unemployment Rate

10.9%

10.9%

10.8%

USD

ADP Nonfarm Employment Change

119K

177K

201K

Economic Events for May 3, 2012 for the European and US Markets

GBP Nationwide HPI

Change in the selling price of homes with mortgages backed by Nationwide. It’s a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity.

EUR French Industrial Production

It’s a leading indicator of economic health – production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings; measures Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

GBP Services PMI

Survey of purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.

EUR Minimum Bid Rate

Measures Interest rate on the main refinancing operations that provide the bulk of liquidity to the banking system. Short-term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future.

EUR ECB Press Conference

It’s the primary method the ECB uses to communicate with investors regarding monetary policy. It covers in detail the factors that affected the most recent interest rate and other policy decisions, such as the overall economic outlook and inflation. Most importantly, it provides clues regarding future monetary policy.

USD Unemployment Claims

Measures the number of individuals who filed for unemployment insurance for the first time during the past week. Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions.

USD ISM Non-Manufacturing PMI

The Institute for Supply Management measures the level of a diffusion index based on surveyed purchasing managers, excluding the manufacturing industry. It’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

Government Bond Auctions (this week)

Date Time Country

May 03 08:30 Spain

May 03 08:50 France

May 03 09:10 Sweden

May 03 09:30 UK

May 08 09:15 Austria

May 08 09:30 Belgium

May 08 14:30 UK

May 08 15:30 Italy

May 08 17:00 US

May 09 09:10 Sweden

May 09 09:30 Germany

May 09 09:30 Swiss

May 09 09:30 UK

May 09 14:30 Sweden

May 09 15:30 Italy

May 09 17:00 US

May 10 15:00 US

May 10 17:00 US

May 11 09:10 Italy BOT auction

May 11 10:00 Belgium

Click here to read EUR/GBP Technical Analysis.

Originally posted here