It's NFP day and the Dollar loses steam – What's next?

Frank Walbaum

Important news for the day

Fri, 07th, 14:30 CET US Nonfarm Payrolls.
Fri, 07th, 14:30 CET CA Unemployment rate.

Positive markets

Equity markets continue with fresh upside momentum. Fresh risk has been taken by market participants and in particular the S&P 500 looks set to move higher. The resistance zone at 6,100 needs to break in order to unleash new upside potential. Crypto markets on the other hand show mixed signs. Etherium keeps trading steady whereas other tokens like XRP and SOL proceed to lower levels.

Market talk

Ahead of the NFP report today the Dollar is losing some steam. Daily charts signal that the Greenback might continue to lose momentum. In particular the EUR, GBP and AUD look like upside potential might occur. From a technical point upside momentum might occur if the 50 -moving average zones will be broken to the upside. Similarly also Silver might be ready to move higher. Will the weakness of the Dollar continue? Potentially a weaker reading of today’s data might indicate sich moves. On another note the CAD might cause fresh momentum today. The Unemployment data would be an interesting watch for our open positions.

Tendencies in the markets

Equities positive, USD weak, cryptos weaker, oil sideways, Silver positive, Gold positive, JPY weaker.

Author

Frank Walbaum

AUD/USD meets fresh supply and tests 0.7100 amid weak Australian PMIs

AUD/USD has come under fresh selling pressure and is testing 0.7100 in the Asian session on Wednesday. Australia's flash PMIs showed manufacturing slipped into contraction and services expanding slowly for a second straight month, renewing the pair's downside. Furthermore, a bullish US Dollar acts as a headwind for the pair as traders keenly await the crucial Trump-Xi summit on Thursday. Meanwhile, markets shrug off US-Iran indirect talks.

USD/JPY stands firm near mid-157.00s, close to two-week high

USD/JPY hovers around mid-157.00s in the Asian session on Wednesday, near two-week highs touched last Friday as the BoJ's dovish rate hike continues to undermine the Japanese Yen. Meanwhile, the US Dollar remains firm amid the Fed's hawkish stance, adding support to the pair, though JPY intervention fears cap further gains. Markets pay little heed to the completion of the round of US-Iran indirect talks ahead of Trump-Xi meeting.

Gold approaches $4,300 as Fed hike bets boost USD to fresh high since late July

Gold extends its steady intraday slide through the first half of the European session, reversing a part of the previous day's recovery from sub-$4,300 levels. US Dollar buying remains unabated on the back of the Federal Reserve's hawkish outlook, which is seen as a key factor driving flows away from the non-yielding yellow metal.

Bitcoin outperforms US equities and Gold since mid-August

Bitcoin (BTC) extends its rally, trading above $86,000 at the time of writing on Wednesday after gaining more than 6% so far this week. Strong institutional demand is supporting BTC’s bullish price action, with spot Exchange Traded Funds (ETFs) recording over $714 million in inflows on Tuesday after nearly $1 billion in positive flows the previous day.

Trump meets Xi: Why markets are watching this summit so closely

United States President Donald Trump and Chinese President Xi Jinping are set to meet in Washington on Thursday for a summit closely watched by markets. After several months of easing trade tensions between the US and China, the meeting could determine whether the world's two largest economies extend their truce or enter a new period of uncertainty.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.