London Forex Report: NFP Shocker Places Attention On Yellen Speech

London Forex Report: NFP Shocker Places Attention On Yellen Speech

London Forex Report: US nonfarm payroll came in a mere 38k in May (April: revised to 123k) as mining sector continued to shed jobs and a strike caused job losses in the telecommunication sector. Disappointing payroll number reinforced Cleveland Fed President Loretta Mester’s view that gradual rate hikes remain appropriate but added not to “read too much into one number”, increasing market’s scrutiny on Yellen’s speech today. Other US data were mixed. Services sector showed signs of slowing down but factory orders gathered steam in April. USD plunged after dismal US nonfarm payrolls dampened Fed rate hike hopes. The USD Index slumped immediately after the release of worse than expected labour market data and slipped lower thereafter, closing 1.61% lower at 94.02

FX Majors: EUR Euro zones services PMI rose from 53.1 to 53.3. After a 0.6% MOM decline in March retail sales, sales were flat from March to April as household consumption remained subdued in the euro area. GBP UK Services PMI in May posted a reading of 53.5, beating forecast of 52.5, but remains subdued as the rate of growth was one of the weakest seen over the past three years JPY surged following the disappointing US jobs reports. Should US rate hike policy continue to get priced-lower across the markets, strength of the Japanese Yen could continue as risk aversion flows persist in the face of gloomy global economic outlook.

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

Technical: The breach of 1.1250 was the catalyst for the push to 1.1350 where the advance has stalled printing a high of 1.13735. As 1.1290 symmetry supports expect a break of highs targeting 1.14 as the next upside objective Below 1.12 suggests false upside break and resets attention on 1.1065
Retail Sentiment: Bearish
Trading Take-away: Long

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

Technical: While 1.4580/1.46 contains upside reactions expect a retest of 1.4330 bids in a pre Brexit referendum range of 1.4770/1.4330
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: Anticipated trend resistance at 111.30 attracted sellers with downside ratchet now targeting a retest of 1.5.55 lows with the potential for a daily double bottom pattern to develop. Failure at 1.05 opens 103 as the next downside objective. 108.50 is the near term pivotal resistance
Retail Sentiment: Bullish
Trading Take-away: Short

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

Technical: Bears came within 20pips of the much anticipated 120.60 level. While 121.20 contains upside reactions expect a grind lower to breach last weeks lows enroute to a weekly equality objective at 117.36
Retail Sentiment: Bullish
Trading Take-away: Short

Commodities FX: GOLD price rallied strongly after the weak US May jobs data dial back the likelihood of a Fed rate hike in the next few months and sent the US dollar tumbling and gold price soaring. The gold price jumped higher by US$30.30 0 to US$1240.10 on Friday Oil prices edged lower on Friday (3 Jun) after the US poor jobs data weakened demand outlook and prices were further hurt by an increase in US rigs for drilling oil by 9, the first increase in 11 weeks, according to oil-related service provider, Baker Hughes. The US Nymex WTI futures decreased by US$0.55 to US$48.62. AUD poor Australian retail sales print prompted increased speculation that the RBA would cut rates again at this Tuesday’s RBA rate decision meeting. Apart from that, Chinese trade balance due this Wednesday will also be focused as well, so as to assess the health of the second largest economy CAD trade deficit in April narrowed from C$3.2 billion in March to C$2.9 billion in April. Higher exports of energy products, industrial machinery, equipment and parts, and metal products contributed to most of the 1.5% growth in exports. Canadian jobs figures will be due this Friday, which are expected to show further improvement in the domestic labour market.

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

Technical: While .7300/.7280 contain downside reactions AUD has a window to recover and test symmetry and structure resistance sited at .7480/.7500 where fresh selling is expected to emerge. Failure at .7210 suggest early reversal with bears targeting .7140 lows and stops below.
Retail Sentiment: Bullish
Trading Take-away: Sidelines

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

Technical: While 1.2910 supports, price continues to carve out a bullish consolidation pattern targeting offers at 1.3210 as the next upside extension target. Only a close below 1.2760 eases bullish pressure and suggest a grind back to test bids at 1.2459 and stops below
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Bids ahead of pivotal1190 proved sufficient to see a sharp reversal from sub 1200 to test offers ahead of 1250. While this level stems the upside expect a rotation back towards 1225, over 1250 opens pivotal 1280 resistance. Failure at 1190 opens 1140/50 symmetry targets.
Retail Sentiment: Neutral
Trading Take-away: Neutral

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

Technical: Second rejection above 50.00 concerns bulls near term although as 46.70 continues to support expect a test of the larger AB=CD swing objective at 51.07, only a close below 43.00 threatens bullish bias
Retail Sentiment: Bearish
Trading Take-away: Long

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