This week's news backdrop will be much stronger than the previous one. The lion's share of influential reports will come from America, so I will focus on them in this article. Before delving into the data that could significantly affect the dollar's fate, I should note that the labor market and unemployment reports are currently the most crucial because they, along with inflation, have an influence on when the Federal Reserve will stop raising rates and start lowering them. Reports on GDP or business activity are nowhere near as influential as the aforementioned ones.
The first influential report will be released on Tuesday – the JOLTS number of job openings. It's expected that this figure will slightly fall compared to the previous month, but it's rare for the actual value to deviate significantly from market expectations. Hence, while the report is important, the dollar's reaction will depend on the actual figure, which could be neutral.
The second key report is the ADP report on changes in employment in the non-farm sector. This is analogous to the Nonfarm Payrolls but with lesser significance to the market. The reaction to this report happens quite often, and its values often do not meet market expectations. However, the market values payrolls more, and the final assessment of the labor market's state will be based on the payrolls. Nonetheless, a reaction to the ADP report might also follow.
The third important report is the unemployment rate on Friday. It is expected that the unemployment rate will remain unchanged at 3.5% in August. However, its increase or decrease can greatly influence market sentiment. I believe that a slight increase will not lead to a decline in the dollar, as this indicator has been near its record lows for a long time.
The fourth important report is Nonfarm Payrolls, which will be released at the same time as the unemployment report. Payrolls are more significant, and its value has been declining for some time. However, this should not cause confusion, as the FOMC continually tightens its monetary policy, leading to an economic slowdown. Accordingly, the relationship between expectation and reality will be significant here. The forecast is 170,000. Any value above this might cause an increase in demand for the dollar. And the payroll report will most likely overshadow the unemployment report.
Based on the conducted analysis, I came to the conclusion that the upward wave pattern is complete. I still believe that targets in the 1.0500-1.0600 range are quite realistic, and with these targets in mind, I advise selling the instrument. The a-b-c structure appears complete and convincing. Therefore, I advise selling the instrument with targets set around the 1.0788 and 1.0637 marks. I believe that the construction of a downtrend segment will continue, but a corrective wave might start soon.
The wave pattern of the GBP/USD pair suggests a decline within the downtrend segment. There is a risk of ending the current downward wave if it is wave "d" and not "1". In that case, wave 5 could start from current levels. However, in my opinion, we are currently witnessing the construction of the first wave as part of a new downward segment of the trend. A successful attempt to break through the 1.2618 mark, corresponding to 127.2% Fibonacci, indicates the market's readiness for new short positions. I advise selling with targets set around the 1.2443 mark.
