FOREX traders now looking to US ISM and Thurdsdays G20 meeting ahead of US non-farm number.

FX Focus Shifts to G20 Meeting; Sterling Outperforms
Price action in the majors has been relatively stable overnight with the markets seemingly content on some consolidation ahead of a G20 meeting on Thursday that is generating a lot of attention, in light of the global turmoil and need for a unified solution. Looking ahead, key event risk comes in the form of ISM manufacturing data due at 10:00 EDT. Initially, ADP came out at 8:15 EDT showing more negativity in the labor market down 740,000 this looks to carry over to this Fridays non-farm payroll number showing further attrition in the labor sector, while US pending home sales and construction spending are also due at 10:00 EDT.
Fundamental outlook; Price action in the majors has been relatively stable overnight with the markets seemingly content on some consolidation ahead of this weeks G20 meeting on Thursday that is generating a lot of attention, in light of the global turmoil and need for a unified solution. On the data front, the increase in the UK PMI has pushed the pound sterling higher on the session, while weaker German retail sales were a disappointment to the Euro zone along with the spike in unemployment in the Euro zone has weighed on the Euro during the early parts of the US session. This has been reflected in the Eur/Gbp cross. Elsewhere, Swiss PMI was slightly weaker, while Australian retail sales came in much worse then expected. In New Zealand the Kiwi was weighed down early on following the dovish comments from the Retail Bank of New Zeeland as they show there concern over the increase in long term rates. Equities are point pointing to a lower open. In commodity price action, oil is now well below $50 and down some 2.50% on the day, while gold is 1.00% higher. Looking at today’s numbers out of the US, key event risk comes from today’s ISM (36.0 expected) due at 10:00EDT. Initially, todays release of the ADP report expectation was (-663k) however coming much higher at -742,000, while US pending home sales are still due out at 10:00 (0.0% expected) and construction spending (-1.9% expected) are also due out at 10:00 EDT. On the official circuit, more comments are sure to emerge pre-G20.
We are looking at the recent consolidation in the EUR/USD as we continue to test the 25% Fibonacci retracement level as support after our recent bounce from the 100 day SMA. The cable has a similar look to it at this time showing some relative strength today with the pair breaking back above Tuesday’s high and now looking to test the 14-Day SMA. We are expecting that institutions may look to buy Cable at or near 1.4280. Trader’s may be more cautious on the EUR/USD on expectations that the ECB may lower its main refinancing rate by 50 bps to 1% on Thursday and there deposit rate to 0.25% during Thursday meeting. As recent data suggested downside risk of the nation's economy and inflation rate has undershot the central bank's 2% target level, we expect policymakers will speed up the monetary easing process or even announce some kinds of quantitative easing measures.