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US jobs data take centre stage on Wednesday, as the ADP Research Institute unveils its latest jobs report.

ADP's report, which is due at 12:15 GMT, is expected to show the creation of 185,000 private sector jobs for the month of July. That follows a gain of 158,000 from the previous month.

Although the ADP numbers usually track closely with the official nonfarm payrolls report, last month's tally diverged from the official result. The Labor Department announced on 7 July that 222,000 nonfarm jobs were added to the economy in June.

The ADP data provide a snapshot of private-sector job creation by employer type and industry, giving investors granular insights into the economy. Official nonfarm payrolls are due 48 hours later.

The North American calendar is relatively calm after the ADP report. The US Energy Information Administration (EIA) will release its weekly crude inventory report at 14:30 GMT. Crude stocks are forecast to have declined by 2.9 million barrels in the week ended 28 July. Stockpiles plunged by 7.1 million barrels the week before.

In monetary policy, Federal Open Market Committee (FOMC) members Loretta Mester and John Williams are scheduled to deliver speeches throughout the day. Their comments will be closely monitored by rate-watchers and currency traders.

Investors looking to trade in advance of the North American session will find a steady stream of economic data to look forward to. Action begins at 5:45 GMT with the SECO consumer climate survey, which provides a barometer of consumer confidence in Switzerland.

At 7:00 GMT, the Swiss government will unveil its latest employment data for the month of July. The number of people on unemployment benefits is forecast to decline by 66,500.

Swiss retail sales and PMI data will make headlines at 7:15 and 7:30 GMT.

At 09:00 GMT, the European Commission's statistical agency will report on producer prices for the month of June. The producer price index (PPI) is projected to decline 0.1% month-on-month.

EUR/USD

The euro gained too much, too fast at the start of the week, pushing the EUR/USD into overbought territory. The pair remains well supported, but has given back some of its gains. Initial support is located at 1.1780. On the opposite side of the ledger, strong resistance is gauged at 1.1870.

GBP/USD

Pound sterling is maintaining a strong pivot near 1.3200 US. Despite recent gains, the GBP/USD could be subject to volatility later this week as the Bank of England (BOE) votes on monetary policy. The pair is eyeing 1.3250 as a near-term resistance.

USD/CHF

The USD/CHF bounced on Tuesday, as the dollar erased some of its early-week gains. However, the USD/CHF faces immediate resistance at 0.9700, with a rally north of that level needed to erode the pair's three-month downtrend.

AUD/USD's technical structure has finally not reversed. Hourly resistance is now given at 0.8066 (27/07/2017 high). Hourly support given at 0.7875 (21/07/2017 low). Expected to show further consolidation.

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

USD/CAD's bullish momentum is showing ending signals. The pair remains nonetheless in a strong bearish momentum. Hourly resistance is given at 1.2589 (02/08/2017). Expected to show continued consolidation above 1.2400.

In the longer term, the pair has broken longterm support that can be found at 1.2461 (16/03/2015 low) before bouncing back. Strong resistance is given at 1.4690 (22/01/2016 high). The pair should head further lower.

USD/CHF is pausing. Hourly support can be found at 0.9439 (21/07/2017 high). Strong resistance is given at 0.9771 (15/06/2017 high) is on target. Expected to to show further strengthening.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/JPY's bearish momentum continues. despite short-term bounce. Hourly support is given at 109.93 (01/08/2017 low). Stronger support is located at a distance at 108.83 (17/04/2017 low). Expected to show further downside pressures.

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

GBP/USD still lies within a bullish trend. Hourly resistance is now given at 1.3245 (01/08/2017 high). Hourly support is given at 1.2933 (20/07/2017 low). Expected to show further upside pressures.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

EUR/USD bullish pressures continue. Hourly resistance is given at 1.1846 (31/07/2017 high). Hourly support can be found at 1.1613 (26/07/2017 high). Stronger support lies at 1.1292 (28/06/2017 low). Expected to show continued bullish pressures.

In the longer term, the momentum is now turning largely positive. We favour a continued bullish bias. Key resistance is now holding at 1.1871 (24/08/2015 high)t while strong support lies at 1.0341 (03/01/2017 low).

The Aussie stands at the back foot on Wednesday and dipped to 0.7940, after Tuesday’s trading ended in red, following repeated upside rejection and failure to close above important 0.8000 barrier.

Upbeat Australian building data, released earlier today, had no significant impact on the pair’s near-term action which remains in red.

Diamond top pattern is forming on daily chart and signaling reversal, which requires break below pattern’s support line at 0.7935 to generate stronger bearish signal.

Sustained break lower would open way towards next pivotal support at 0.7877 (Fibo 38.2% of 0.7572/0.8065 upleg), loss of which would confirm reversal.

The pair eyes US jobs report and RBA Monetary Policy Statement for stronger signals.

Res: 0.7974, 0.8000, 0.8042, 0.8065
Sup: 0.7935, 0.7900, 0.7877, 0.7846

NZD slides as unemployment report disappoints

The New Zealand extended losses on Wednesday amid the release of disappointing data from the job market. After grinding lower yesterday, NZD/USD fell another 0.55% to 0.7425, its lowest level of the past five days. Despite the fact that the second-quarter unemployment rate matched estimate of 4.8%, down from 4.9% in the previous one, the details do not look that great. The employment change shrank 0.2%q/q (+0.7% expected) in the June quarter, while previous quarter’s print was downwardly revised to 1.1%. The participation rate slip to 70% from 70.6%, while average hourly earnings grew 0.8%q/q, compared to 0.9% median forecast.

That gets to be a lot of disappointing data from the Kiwi economy. The last inflation report already showed that a downside adjust to the forecast may be necessary. This unemployment report could be the beginning of the end of the multi-month rally. Investors are heavily skewed to the upside in NZD/USD with long net speculative position reaching 63.70% of total open position. In addition, the Reserve Bank of New Zealand, which will hold a monetary policy meeting next Wednesday, will likely sound dovish. Indeed, the RBNZ is never tired of emphasizing the excess strength of the Kiwi, even more when economic data are on the slim edge.

In our opinion, the risk is definitely on the downside and a reversal of the NZD/USD is more than likely, especially against the backdrop of extreme speculative positioning.

High expectations for the US ADP data

Today we get US labor ADP data ahead of the NFP report on Friday. Bloomberg Survey indicates new jobs creation for July of 190k compared to the prior June read of 158k. The overall sentiment is positive and it has been 7 years that the data print positive. There is the widespread idea that the US economy is recovering. However we rather believe that the US economy is stalling. GDP growth, is by the way in its second-worst year since 1959. On top of that credit demand is contracting which should weigh on growth and tax receipts are negative.

This is why traders will clearly have the downside risks in the back of their minds. While ADP has had a history of spectacular misses for predicting NFPs over the past months, ADP has often been a pretty accurate forecast for the NFP change.

We suspect that ADP is likely to print below the current expectations. A poor labor read will keep adding downside pressures on the greenback lower, and fuel the main country equity indexes as a US weak economy will push away Fed rate-tightening policy discussion. We think that the EURUSD is heading towards 1.20.

The pair bounced on Wednesday after attack at 110.00 support was short-lived (the price spiked to 109.91 on Tuesday) as the price also failed to close below Fibo 76.4% support at 110.14.

Today's recovery approached 111.00 barrier (falling daily Tenkan-sen) attracted by daily cloud twist on Thursday).

The action is supported by reversing daily RSI / slow stochastic indicators, but limited upside action is expected before broader bears resume.

Upticks should be ideally capped at 111.00 zone to keep negative structure intact for renewed attack at 110.00 support zone.

Alternatively, break and close above daily cloud (cloud top lies at 111.24 today) would signal extended recovery and shift near-term bias to the upside.

Res: 111.00, 111.24, 111.32, 111.65
Sup: 110.62, 110.14, 109.91, 109.26