Alpesh Patel
InvestingBetter.com
General market theme
So the Non-Farm Payrolls report is now behind us and we consider ourselves wiser about the progress of the US domestic economy and interested to see how the market will react to these figures. The report printed in a mixed manner as the number of people added to the workforce beat expectations and the unemployment rate held steady at its low levels but the average hourly earnings component declined.
We have explained how important wage growth is for the Fed and their rate hiking agenda and we believe that given these figures they will not move forward with another rate hike for now. Moving forward the attention now turns to the Euro and the upcoming ECB meeting on monetary policy as fresh easing could be in the cards for the Single currency.
Price action highlights
The Euro was quite volatile on Friday on the back of the NFP report and especially after the way the figures printed. The initial reaction was a Dollar rally that pushed the Euro towards the 1.0900 area as investors were surprised by the strong number of new jobs added and the low unemployment rate but very quickly this rally was reversed. The Euro hiked towards the 1.1050 level but this attempt was also reversed and the Single currency ended the way where it started as investors shifted their focus on the upcoming ECB meeting and its bearish bias.
The Cable was a bit more resilient on Friday and even though it pushed lower to test the 1.4100 support level when the NFP figures hit the wires the UK currency edged higher and reached the 1.4250 area. However this morning the Pound is turning lower again and the 1.4200 level is threatened with the pivot point siting around the 1.4150 area. The short-term support for the Cable lies at the 1.4100 level and for any reversal to pick up pace we need to see a break below this key support figure.
Focus of the day
Today the focus will turn to the Euro as investors are preparing for the upcoming ECB meeting, the calendar is virtually empty of any important report other than the Sentix Investor Confidence reading this morning. A potentially higher reading will do little to change the bearish bias market participants have for the Euro but we don’t expect too much volatility so early in the week.
Past performance is not indicative of future results. Trading forex, CFDs and equites carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts. The information provided by InvestingBetter.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. InvestingBetter.com are merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. InvestingBetter.com and/or its owners will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on InvestingBetter.com. InvestingBetter.com does not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.
Recommended Content
Editors’ Picks
EUR/USD rises to daily tops past 1.0800 post-NFP
The selling bias in the Greenback gathers extra pace on Friday after the US economy created fewer jobs than initially estimated in April, lifting EUR/USD to the area of fresh peaks above 1.0800.
GBP/USD surpasses 1.2600 after disheartening US Payrolls
The resumption of the downward pressure in the US Dollar motivates GBP/USD to extend its earlier advance to the area beyond 1.2600 the figure in the wake of the release of US NFP.
Gold climbs to new highs above $2,300 on poor NFP prints
The precious metal maintains its bullish stance and breaks above the $2,300 barrier on Friday after US Nonfarm Payrolls showed the economy added fewer jobs than expected during last month.
XRP edges up after week-long decline as Ripple files letter in reply to SEC’s motion
Ripple filed a letter to the court to support its April 22 motion to strike new expert materials. The legal clash concerns whether SEC accountant Andrea Fox's testimony should be treated as a summary or expert witness.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.