Financial Market Research and Analysis

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US labour data to set the tone

The recent recovery in the EURUSD remained limited below the critical 1.1215 (major 38.2% retracement on Aug 8th – Aug 31st decline). The US labour data should distinguish between a short-term bullish reversal toward 1.1245, 1.1273 and 1.1308 (Fibonacci’s major 50%, 61.8% and minor 76.% retrace) and a pullback toward the 1.1045 (August support) before 1.1000. Intermediate resistances are eyed at 1.1215 (major 38.2% retrace), 1.1225 (200-hour moving average).

 

The USDJPY treaded water, as the positive momentum gradually lost pace on hourly basis before the US jobs data. The US dollar is key  to determine the short-term direction in the USDJPY. A solid NFP read could further improve he US yields and pave the way for a further recovery toward 105.00 / 107.45 area. While a disappointment in the US data could hint at a short-term downside correction. Technically, the pair is considered in the positive trend above 102.48, the major 38.2% retracement on post-Jackson Hole rally.

 

The solid UK PMI read triggered a decent rally in the pound yesterday. The Golden Cross (50-hma crossing above the 200-hma) underpinned the short-term positive momentum. The GBPUSD hit the overbought territory on hourly basis. We could expect a flat session until the US jobs data release. A solid US data should encourage a short-term downside correction toward 1.3218 (major 38.2% retrace on Aug 29th – Sep 1st rally), while a negative surprise could pave the way toward 1.3500 (psychological resistance) and 1.3640 (major 38.2% retracement on post-Brexit sell-off, mid-term resistance to the post-Brexit bearish trend).

 

AUDUSD recovered to 0.7550, the minor 23.6% retrace on Aug 16th – Aug 31st decline. The carry traders are in a wait-and-see mode before the US labour data. A stronger USD appetite would further damage the carry inflows and pave the way for a further sell-off toward 0.7440/0.7420 (July support). On the topside, 0.7575/0.7588 (200-hour moving average / major 38.2 retrace on Aug 16th – Aug 31st decline) should provide a solid resistance before next week’s RBA meeting.

 

For gold traders, today is all about the US jobs data and the US dollar. Only a disappointment could give a positive spin to the weakening gold prices. The rising hawkish expectations regarding the Federal Reserve (Fed)’s monetary policy, will likely keep the pressure for a further retreat to $1300 / 1297 (100-day moving average / minor 23.6% retracement on Dec’15 – Jul’16 rise). Any upside attempt is expected to see resistance pre-the 50-day moving average ($1337).

 

The barrel of WTI stabilised after having shortly traded below the $43 in New York yesterday. We maintain our short-term bearish view below $45.45, the major 38.2% retrace on Aug 19th – Aug 31st drop, and expect a potential pullback toward $41.50 before $40.

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