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The Fed's worst non-farm payroll (NFP) report in 6 years (NFP 38K against forecast 159K) wasn’t balanced out by the lower than expected unemployment rate (actual 4.7% against 4.9% expected). The US dollar dropped against most of the G10 currencies, except British pound, still affected by the Brexit talks seventeen days away from the referendum. Today, Fed’s Chair Yellen's speech about the economic outlook and the monetary policy is likely to bring some more volatility in the US dollar. The economic calendar is very light.
With the probability of a Fed rate hike in June/July fading away, the EURUSD jumped above 1.1350, ready to test the resistance at 1.1359 (23.6% Fibonacci retracement on December to May rise), and if that is cleared, we expect a further rise to 1.1400 mark before the top level at 1.1616 (May 2nd high). The first support is seen at 1.1300/02 (50-dma), if that is broken, we could see a slump to 1.1232 (100-day moving average) before the critical support 1.1200/1.1198 (38.2% Fibonacci retracement).
Last week, USDJPY sold off heavily and the disappointing US job data pushed the pair below the 107.00 mark. Today, the US dollar is retracing partially and we could see a test of the 107.00 mark before a potential rise to 107.39 (11.4% minor Fibonacci retracement on February to May decline). Above this level, the USDJPY is expected to rise to 108.00, to 108.96/109.00 (50-dma), then to 109.36 (23.6% Fibonacci retracement). A slide below 106.36 (intraday low) is likely to cause a further downside to 105.54 (May 2nd bottom level).
After having tested the 200-dma last week, Cable was pushed back around the 1.4400 mark. The high volatility is caused by the frequent news coming from new Brexit polls. The GBPUSD consolidates above the 1.4400 with the first support eyed at 1.4411 (38.2% major Fibonacci retracement on February to May rise). (Full stop, new sentence) The critical support is seen at the 1.4330 neck-line level, below which, the double top pattern could push the pair toward the 1.4000 mark. If the resistance AT 1.4451 (50-dma) is surpassed, the pair could recover to 1.4548 (23.6% Fib retrace)
The AUDUSD broke the 200-day moving average to the upside, taking advantage of the soft US jobs report. The pair could extend gains toward the 100-day moving average, 0.7420, in an effort to surf on better commodity prices.
The combination of a cheaper US dollar, low US yields and the limited risk appetite, keeps Gold bid above the 100-day moving average, $1237.
Not only the weaker US dollar, but also the sabotage in the Nigerian’s production has lifted the oil prices up. On WTI offers are expected to remain solid at $50 / $50.20.