London Forex Report: Jobs Data Adds To Growth Concerns

London Forex Report: Jobs Data Adds To Growth Concerns

London Forex Report: Dataflow was largely negative into the back end of last week, renewing concerns over global growth. The US added the least jobs in seven months, with the nonfarm payroll printed only 160K in April and two months net revision was down 19K. This disappointing headline reading and the slight 0.2% ease in participation rate to 62.8% was nevertheless somewhat mitigated by quicker wage growth (+0.3% MoM) and steady unemployment rate at 5.0%. USD advanced after jumping higher in US afternoon to overturn early losses. The USD Index tumbled on less upbeat US data but recovered going into Friday’s closing to gain 0.12% to 93.88

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

Fundamental: EURUSD spiked to a daily high of 1.1476 right after the US nonfarm payrolls report, but weakness in the greenback was short-lived and the pair fell to test 1.1400 handle before recovering some ground. The EURGBP pair bounced-off a daily low of 0.7865 during European session and further rose to a daily high of 0.7918 during New York session.

Technical: EUR bulls back under pressure with the failure at 1.1450, the next support level to be tested will be the symmetry support at 1.1368 failure here opens a return to retest 1.1240 support,
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: GBP the worst-performing major currency this year, suffered its biggest decline in six weeks as a raft of data added to signs the economy is stagnating before a referendum that may see Britain leave the European Union. Manufacturing, construction and services industries data all trailed behind market forecasts last week.

Technical: A failure at 1.4470 opens a deeper correction to 1.4280 next. Intraday resistance is now sited at 1.4540/60
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: USDJPY fell sharply and posted a fresh daily low of 106.43 as the USD weakened following the release of disappointing US nonfarm payrolls report but then rose back above 107 handle again. The USD finished the week higher against the JPY but still traded considerably below where it was before the decision of the Bank of Japan of April 28 to leave monetary policy unchanged that triggered a rally of the yen in the market.

Technical: 105.50 weekly swing objective achieved, 107.50 now becomes resistance a move through here opens a retest of 110 from below.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: Adding to pressure on growth after extended weakness in the local manufacturing scene, Japan’s service sector contracted for the first time in more than a year. Nikkei services PMI fell to 49.3 in April (March: 50.0), marking the first decline since March 2015 and adding to signs that weakness in Q1 will prevail this quarter.

Technical: Bears now target weekly symmetry objective at 120.60. Only a close over 126.80 eases immediate downside pressure. Intraday resistance now sited at 123.30/50.
Retail Sentiment: Bearish
Trading Take-away: Long

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

Fundamental: AUD dropped sharply through 74 US Cents following the release of the RBA Quarterly Monetary Policy Statement, in which the central bank cut its inflation outlook for 2016 from 2-3% to 1-2% and left the doors wide open for further rate cuts in the future. AUDUSD was then hovering around 0.7360 into the weekend, amid the mixed USD overnight as the hawkish speech delivered by Federal Reserve’s Dudley was offset the weak US jobs data.

Technical: The failure at .7450 opens .7330 as the next downside objective intraday resistance is sited at .7490, this level is pivotal for the upside correction to be maintained.
Retail Sentiment: Bullish
Trading Take-away: Short

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

Fundamental: USDCAD continued to edge higher last Friday to reach a two-week high as Canada’s labor market lost 2,100 jobs in April against an addition of 200 jobs expected. According to the jobs report, most of the job losses came from the natural resources sector. The cut in Alberta’s oil production due to a raging wildfire has kept oil prices supported above $45, offsetting some of the weakness in the loonie. USDCAD ended the North American session at 1.2907, higher than Thursday’s close of 1.2868.

Technical: The close above 1.2750 negates near term bearish pressure and open a move to 1.30 as the next upside objective. 1.2740/60 should now act as support for further upside corrective action.
Retail Sentiment: Bearish
Trading Take-away: Long

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