The data published by Automatic Data Processing (ADP) showed on Wednesday that private sector employment in the US rose by 239,000 in October. This reading came in better than the market expectation of 193,000. September print of 208,000 got revised down to 192,000.
Developing story...
The US Dollar Index showed no immediate reaction to this data and was last seen losing 0.22% on the day at 111.30.
AUD/NZD continued to trade with a heavy downside bias amid growing policy divergence between the Reserve Bank of Australia and the Reserve Bank of New Zealand. Economists at OCBC Bank maintain a short bias targeting 1.12.
“RBNZ’s accompanying MPS was slightly more hawkish than expected as it noted that the MPC considered 50, 75 bps at this meeting; core CPI is ‘too high’ and lower NZD if sustained poses further upside risk to CPI.”
“We maintain our tactical short play on AUD/NZD, targeting 1.12, 1.1050 objectives.”
“Daily momentum is bearish while RSI fell. Risks remained skewed to the downside.”
“Support at 1.1240, 1.1210 levels.”
“Resistance at 1.1305 (21 DMA), 1.1380 levels.
EUR/GBP picks up bids to reverse Friday’s losses. Economists at Société Générale expect the pair to extend its race higher on a break past 0.8720.
“EUR/GBP recently gave a break above the descending trend line drawn since 2020 denoting potential upside. This is also highlighted by weekly MACD which is now firmly anchored within positive territory and above its trigger.”
“The pair is close to key graphical resistance of 0.8720. Once this is reclaimed, the up move is likely to extend towards projections of 0.8860 and perhaps even towards 0.8980/0.9010.”
Statistics Canada is scheduled to publish the monthly employment details for July later this Friday at 12:30 GMT. The Canadian economy is anticipated to have added 20K jobs during the reported month, up sharply from the 43.2K decline reported in June. Meanwhile, the unemployment rate is expected to edge higher to 5.0% in July from the 4.9% previous.
Analysts at TD Securities (TDS) are more optimistic about the report and explain: “We look for job growth of 38k in July, driven by a partial rebound for trade services and natural resources after their sharp decline in June. Full-time hiring should lead the increase, while stronger labour force participation should keep unemployment stable at 4.9%. We also expect to see wage growth firm to 6.0% y/y in July, although AHE (Average Hourly Earnings) should slow on a m/m basis.”
DXY navigates the fourth consecutive session with losses and revisits the 105.30 region at the beginning of the week.
The index broke below the multi-session pre-FOMC consolidative theme and in doing so it has paved the way for extra decline in the short-term horizon. That said, the immediate support now turns up at the interim 55-day SMA at 104.75 ahead of the 5-month support line around 103.85.
The near-term outlook for DXY remains constructive while above this 5-month support line near 104.00.
In addition, the broader bullish view remains in place while above the 200-day SMA at 99.49.
"It is with sadness that I am resigning as Housing Minister," Conservative MP for Pudsey Stuart Andrew announced via Twitter on Wednesday.
Meanwhile, Sajid Javid, former British Health Minister who quit in protest at Prime Minister Boris Johnson on Tuesday, told Parliament that it had become increasingly difficult to be in PM's team.
"It's not fair on conservative voters who expect better standards," Javid added. "At some point, we have to conclude that enough is enough. That point is now."
GBP/USD stays under heavy bearish pressure on Wednesday and was last seen trading at its weakest level since March 2020 at 1.1877, losing 0.67% on a daily basis.
📕 Comment on Gold on May 9, 2022:
- On Friday, the US released Nonfarm payrolls data, this data was better than market expectations but only caused Gold to decline slightly to 1875. Gold then bounced up to close the daily candle equal to 1875. The bullish candle is around 1882. This also makes the last candle close with a bearish candle, but retreated quite long.
- My personal view at the beginning of this week's trading session is that Gold will continue to gain momentum. The closest support area for this precious metal is around 1873-1877. Here we can establish a long position with a safe target around 1883 -1888.
📕 Comment on Gold on April 29, 2022:
- In yesterday's trading session, after precious metal fell to 1871, Gold rallied strongly to 1896 ($25), closed the day session with a bull pusher and in the early morning of this day Gold continued to rise. up to around 1905. With the current showing of good upward momentum, my view will be to prioritize the bullish option for this precious metal.
- On the H4 time frame, bullish force also prevails and the nearest support area for this precious metal is around 1895-1898, Here we can establish a buy position with a safe target around the threshold. 1910-1915.
📕 Comment on Gold on April 20, 2022:
- In yesterday's trading session, precious metal Gold had one day of decline from 1981 to 1943 ($38), closing the day session with a strong bearish candle around 1949. Gold has returned. back to the upper boundary of the previous sideways range. With Gold approaching this support zone, I think it's likely that Gold will have a rebound in the early trading session today.
- On the H4 chart, Gold may recover to around the threshold of 1950-1951 and is expected to rise around the threshold of 1962-1965. Here, there is a high possibility that Gold will face selling pressure and drop again.
Dow Jones Futures Fall 80 Pts; ADP, GDP Data and Lululemon Results in Focus
U.S. stocks are seen opening lower Wednesday, handing back some of the recent gains as investors await key economic reports on jobs and economic output while monitoring developments in Ukraine.
At 7 AM ET (1100 GMT), the Dow Futures contract was down 80 points, or 0.2%, S&P 500 Futures traded 13 points, or 0.3%, lower and Nasdaq 100 Futures dropped 70 points, or 0.5%.
The main Wall Street indices closed higher Tuesday, with the blue-chip Dow Jones Industrial Average ending 338 points, or 1% higher and the broad-based S&P 500 gaining 1.2%, both registering their fourth straight day of gains, while the Nasdaq Composite climbed 1.8%.
“Nobody should be fooling ourselves by the Kremlin’s now-recent claim that it will suddenly just reduce military attacks near Kyiv or any reports that it is going to withdraw all its forces,” John Kirby said. It’s “a repositioning, not a real withdrawal” from positions around the Ukrainian capital.
Also catching the interest of investors are a series of important data releases given the Federal Reserve is in the process of weighing up how aggressively to hike interest rates at its May meeting.
Expectations of sharp interest rate increases saw the 2-year Treasury yield briefly climb above the 10-year for the first time since 2019, a move that is often seen as a warning of an upcoming recession.
March's ADP nonfarm employment change data is set to be released at 8:15 AM ET (1215 GMT), with consensus forecasts looking for companies to have added 450,000 jobs, while GDP for the fourth quarter, at 8:30 AM ET, is set to show a 7.1% reading from the month before, well above the previous 2.3% release.
In the corporate sector, Micron Technology (NASDAQ:MU) traded higher premarket after the company gave a robust forecast for the ongoing quarter, suggesting demand from data centers remains strong.
Lululemon (NASDAQ:LULU) will also be in the spotlight after the athletic apparel maker beat quarterly earnings estimates and announced a $1 billion stock buyback program.
Oil prices rose Wednesday, rebounding after a two-day retreat following a fresh reminder of the tight nature of the market as data showed U.S. crude stocks fell sharply last week.
Data from the industry body, the American Petroleum Institute, showed U.S. crude inventories fell by 3 million barrels in the week ended March 25. The official data from the Energy Information Administration is due later in the session.
The oil market had dropped sharply this week on progress in the Ukraine/Russia peace talks as well as demand worries over fresh Covid-19 lockdowns in China, the world’s largest crude importer.
By 7 AM ET, U.S. crude futures traded 2.5% higher at $106.84 a barrel, while the Brent contract rose 2.4% to $110.29.
Additionally, gold futures rose 0.4% to $1,919.20/oz, while EUR/USD traded 0.4% higher at 1.1129.
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