London Forex Report: Dollar Bid On Better Jobs Data

London Forex Report: Dollar Bid On Better Jobs Data

London Forex Report: Surprisingly upbeat US nonfarm payroll gains of 255K shored up expectations the Fed would be able to raise rates again by December. Payroll rose 255k in July after an upwardly revised 292k increase in June. Net two month revision for May and June was +18k. Other job details were also solid. Unemployment rate was unchanged at 4.9% and labor force participation rate ticked up 0.1ppt to 62.8%. Wage growth also quickened from 0.1% to 0.3% MOM. USD rallied on the back of a set of strong US labour market data. The USD Index surged post-US data before narrowing to register slight gains thereafter to close 0.46% higher at 96.19.

FX Majors: EUR dipped against the USD Friday after the data suggested the chance of Fed hike for 2016 may be higher post-payrolls. EURUSD dropped to a one-week low of 1.1043 and also closed lower at 1.1085. EURUSD recovered part of the previous losses Friday after the strong US non-farm data, filled the gap and traded to 1.1100 overnight. The euro is now consolidating below 1.1100 handle while markets still need time to digest the US non-farm figure GBP sank towards 1.30 against the US dollar last Friday. The pair hit a three-week low of 1.3019 after the strong US non-farm payrolls report strengthened speculation that the US would raise interest rate this year.The pound’s drop after the Bank of England unleashed billions of pounds of stimulus was “relatively small” compared with its fall after the June vote to leave the European Union, BoE’s Deputy Governor Ben Broadbent said last Friday. He was “pretty confident” that the BoE’s stimulus package would have some effect and he did not agree that the central bank’s actions reflected panic. JPY According to a survey by The Economic and Social Research Institute, Japan’s economic conditions have improved in June. The coincident index increased from 109.9 in May to 110.5 in June amid increase in industrial output and shipments of manufactured goods. However, assessment of economic conditions in the near future was more downbeat. Leading index dropped from 99.7 in May to 98.4 in June as confidence of households securing new job offers declined.

EURUSD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: 1.1090 downside objective achieved, while 1.1040 supports there is potential for a near term base to target 1.1330. Failure below 1.1030 opens 1.0950 on the downside.
Retail Sentiment: Neutral
Trading Take-away: Neutral

GBPUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Technical: Trade below 1.3150 (prior support which now becomes near term resistance) opens 1.2950 equidistant swing objective.
Retail Sentiment: Bullish
Trading Take-away: Short

USDJPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: The close below 103 will see bears target a retest of cycle lows below 100. Near term resistance is sited at 102.80
Retail Sentiment: Bullish
Trading Take-away: Short

EURJPY
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: The breach of 113 opens 110.80 as the next downside objective. Near term resistance is sited at 113.90
Retail Sentiment: Bullish
Trading Take-away: Short

Commodities FX: GOLD fell by $25.15 per ounce, or 1.85% to $1,341.40 after the strong set of U.S jobs numbers. Oil settled 0.31% lower to $41.80 a barrel on Friday as a stronger dollar weighed on commodities. Supply glut concerns returned as a weekly report showed an sixth straight week increase in the number of U.S operating rigs, by 7 rigs to a total of 381. AUD RBA’s quarterly statement of monetary policy showed growth and inflation outlook were little changed. This offered little clues of RBA’s next move but markets believe room for further rate cut is rather limited at this juncture unless macro outlook turns significantly for the worse. CAD Canada’s unemployment rate rose to 6.9 percent in July from 6.8 percent a month earlier, an increase in line with investors’ forecasts, according to Statistics Canada said last Friday. The Canadian dollar weakened sharply against the greenback as the data contrasted with better than expected US job reports. Canada also released Ivey PMI of July. The data rose to 57.0 from 51.7 in June, which was the highest reading since January and well above the markets’ forecast of a slip to 50.0

AUDUSD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: Range resistance at .7676 under pressure with near term support now at .7570, a close over .77 will shift attention to broader range resistance sited at .7830
Retail Sentiment: Bearish
Trading Take-away: Long

USDCAD
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Technical: Sharp reversal ahead of 1.2965 symmetry swing support sets bullish sites on the upside equidistant swing target of 1.3380. Failure below 1.2950 opens 1.2860 as the next downside objective.
Retail Sentiment: Neutral
Trading Take-away: Neutral

XAUUSD
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bullish

Technical: Bulls target 1391 as the next upside objective, near term support is sited at 1330. Below 1300 opens 1270
Retail Sentiment: Neutral
Trading Take-away: Neutral

USOIL
Outlook: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks): Bearish

Technical: Breach of bids at 41.87 opens 38.19 as the next downside objective, expect symmetry swing resistance sited at 43.28/96 to stall the corrective advance, a close over 44.40 is required to ease bearish pressure.
Retail Sentiment: Bullish
Trading Take-away: Short

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