Morning Briefing: US NFP data coming out higher

Vikram Murarka Kshitij Consultancy Services

With US NFP data coming out higher (261K) than market expectation (200K), higher unemployment rate, lower wage inflation and rumors of re-opening of China after COVID restrictions, Dollar Index fell sharply on Friday but is likely to bounce back while it holds above 110. Further bearishness would come in on a break below 110. Euro can dip from 1.00/01 back towards 0.98. Aussie and Pound have managed to rise a bit but may continue to face resistance near 0.6550 and 1.14 respectively. EURJPY is bullish while above support at 144. Dollar Yen dipped too along with the fall in the US Dollar but has bounced well indicating a possible rise to 149 while above 145.USDCNY can trade within 7.15-7.35 while USDRUB can ranged too within 60-63. EURINR-has resistance near 82.50 which if holds can produce a fall. USDINR may open with a gap down and test 82-81.80

The US Treasury yields look mixed. The 10Yr and 30Yr will have to sustain above their key near-term supports to make a sustained upmove from here. The price action in the next few days will need a close watch. The German yields continue to move up and have room to rise further from here. The 10Yr and 5Yr GoI are oscillating near the upper end of their respective range.

Dow needs a strong follow-through rise from here to move up above 33000 and to negate a fall back on the downside. DAX has rebounded sharply and has room to rise further on the upside.. Nikkei needs a sustained move above 27500 to rise further towards 29000. Shanghai struggles to move up above 3080. Nifty is bullish for a rise towards 18300-18400.

Brent and WTI needs a strong rise past $99-100 and $92.50 to move up further on the upside. Gold, Silver and Copper rose sharply to test crucial resistance at 1685, 21.00 and 3.70 respectively after the release of US Non-Farm Payroll on Friday and have fallen back from there.

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Author

Vikram Murarka

Kshitij Consultancy Services

Vikram has been forecasting, trading and hedging currencies since 1991. Beginning his career as a currency trader in Essar Group, he was managing an FX exposure of $1.2 bln.

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