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Market Braces For March US Employment Data

Apr 5 2019, 06:53 PM (BDT) |

NFPs Up Next

Over the European morning on Friday, the US Dollar was slightly higher, though roughly unchanged on the week with the Index at 96.89 at time of writing. USD had early strength capped this week as optimism regarding a potential US/China trade deal has seen safe haven outflows from the USD as equities surge higher. Looking ahead to the US session today, traders await the release of March labor market data with Non-Farm payrolls, wages, and the unemployment rate all due.

ECB Concerned For Growth

EURUSD trades a little firmer today, still sitting above 1.1174 support, despite a dovish set of ECB meeting minutes which highlighted the extent of the bank’s concerns. Growth worries have so far derailed the ECB’s plans for a rate hike this year with Draghi recently saying that rates will likely remain on hold through the year now.

Brexit Blur Continues

In the UK, Brexit uncertainty is keeping GBPUSD pressured ahead of the current April 12th deadline. While GBPUSD is still above 1.30 support, the tone has been heavy this morning as traders react to growing domestic political division as more Conservative MPs quit.

Equities Traders Excited

Equities have been the standout winner this week with optimism over the US/China trade deal pushing the SPX500 up to levels not seen since October 2018. Trump told reporters outside the White House yesterday that a deal could come as soon as four weeks from now. SPX500 is currently sitting well above the 2860.11 resistance level, now turned support, as bulls eye a move back to all-time highs.

Safe Havens Down on Frida

Gold prices have been a little less buoyant in light of better risk appetite. XAUUSD traded lows of 1280.97 this week before rebounding some on a weaker US Dollar. The potential for a lasting deal between the US and China doesn’t bode well for gold bugs, though USD direction could keep gold supported.

Better risk appetite was also visible in JPY trading today which continued to fall against USD. USDJPY has now traded back up to the 111.76 level, which is holding as resistance for now. If we break above here, the bearish trend line from 2018 highs is the next level to watch around mid 112.

Oil Lower on Record High US Crude Production

Oil prices have had another strong session this week, extending their advance above the 61.89 level. However, a bearish EIA report yesterday, which highlighted an unexpected build in US crude stocks as well as fresh record highs for US crude production, has seen price shedding a little on Friday. Price is now sitting back on the 61.89 level which is holding as support for now.

Weaker Oil Caps CAD

The moves in oil have created some disparity amongst the commodity currencies this morning. CAD remains weaker against USD with USDCAD moving back up toward the 1.3377 level resistance as weaker oil prices weigh. Looking ahead, traders are waiting for Canadian unemployment data due over today’s US session.

Trade Deal Hopes Boosting AUD

AUDUSD, on the other hand, continues to trade positively against USD as optimism over a potential US/China trade deal keeps the pair supported. A trade deal could provide strong growth for the Aussie economy which could, in turn, solve some of the RBA’s issues, paving the way for a rate hike sooner than currently expected. AUDUSD traded .7116 at time of writing, well up off the .7021 support.

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