Forex Market: USD/HKD daily forecast

During yesterday’s trading session USD/HKD traded within the range of 7.7500-7.7513 and closed at 7.7502.

At 7:57 GMT today USD/HKD was gaining 0.01% for the day to trade at 7.7508. The pair touched a daily high at 7.7509 at 7:42 GMT.

Fundamental view

United States

The deficit on US trade balance probably narrowed to 45.100 billion USD during May from a deficit of 47.236 billion USD, registered in April. The trade balance, as an indicator, measures the difference in value between country’s exported and imported goods and services during the reported period. It reflects the net export of goods and services, or one of the components to form country’s Gross Domestic Product. Generally, exports reflect economic growth, while imports indicate domestic demand. In case the trade balance deficit contracted more than anticipated, this would provide support to US dollar. The Bureau of Economic Analysis will release the official numbers at 12:30 GMT.

The number of people in the United States, who filed for unemployment assistance for the first time during the week ended on June 28th, probably decreased to 310 000 from 312 000 during the prior week. This is a short-term indicator, reflecting lay-offs in the country. In case the number of initial jobless claims dropped more than projected, this would have a bullish effect on the greenback. The Department of Labor is to release the weekly report at 12:30 GMT.

Employers in all sectors of economy in the United States, excluding the farming industry, probably added 212 000 new jobs in June, according to the median forecast by experts, after a job gain of 217 000 in May. The non-farm payrolls report presents the total number of US employees in any business, excluding the following four groups: farm employees, general government employees, employees of non-profit organizations, private household employees. The reading, released most often, varies between + 10 000 and as much as + 250 000 at times when economy is performing well. Despite the volatility and the possibility of large revisions, the non-farm payrolls indicator presents the most timely and comprehensive reflection of the current economic state. Total non-farm payrolls account for 80% of the workers, who produce the entire Gross Domestic Product of the United States. In case of a larger-than-expected gain in jobs, the US dollar would receive a boost.

Average Hourly Earnings probably increased 0.2% in June compared to May, when earnings rose by another 0.2%.

At the same time, the rate of unemployment in the country probably remained unchanged at 6.3% in June. It represents the percentage of the eligible work force that is unemployed, but is actively seeking employment. A person who is not classified as employed or unemployed is excluded from the statistics. One counts as unemployed, if he falls in all of the following categories: he/she was unemployed during the last week; he/she is able bodied; he/she has been seeking employment for a period of at least four weeks, which end during the week when the research is conducted. People, who have been laid off and are awaiting to be hired again, are also classified as unemployed. In case the unemployment rate met expectations or even fell further, this would have a bullish effect on the greenback. The Bureau of Labor Statistics will release the official employment data at 12:30 GMT.

Activity in United States’ sector of services probably remained almost unchanged during June, with the corresponding non-manufacturing PMI coming in at a reading of 56.1, according to expectations, from 56.3 in May. This is a compound index, based on the values of four equally-weighted components, that comprise it. These sub-indexes reflect seasonally adjusted new orders, seasonally adjusted employment, seasonally adjusted business activity and supplier deliveries.

The business report is based on data compiled from monthly replies to questions asked of over 370 purchasing and supply executives operating in over 62 different industries, which represent nine divisions from the Standard Industrial Classification (SIC) categories. Readings above the key level of 50.0 are indicative of expanding activity. In case market expectations are exceeded, US dollar will receive a boost. The Institute for Supply Management (ISM) is to release the official PMI reading at 14:00 GMT.

Hong Kong

Annualized retail sales in Hong Kong probably decreased at a pace of 6.4% in May, according to the median estimate by experts, following another 9.8% drop in April. This indicator reflects the change in the total value of inflation-adjusted sales by retailers in the country and provides key information regarding consumer spending trend, while the latter is a key driving force behind economic growth. In case retail sales index dropped at a faster than expected pace, this would have a bearish effect on the national currency. The Census and statistics department is expected to release the official report at 8:30 GMT.

Technical view

According to Binary Tribune’s daily analysis, in case USD/HKD manages to breach the first resistance level at 7.7510, it will probably continue up to test 7.7518. In case the second key resistance is broken, the pair will probably attempt to advance to 7.7523.

If USD/HKD manages to breach the first key support at 7.7496, it will probably continue to slide and test 7.7491. With this second key support broken, the movement to the downside will probably continue to 7.7484.