All eyes turn to Friday's US Non-Farm Payroll data


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TIO markets
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9 months ago

The day before US NFP data. Not normally the most exciting of days as traders await the big event. Today would certainly start out quietly for FX with EURUSD mustering a whopping 6-point range in Asia. Europe managed to get things moving a little more, but as I sit down early in the US morning the majority of major currencies are only a few points removed from the NY close. The exception would be equities which received a boost as the Chinese government announced a reduction of 50% on about $75 billion worth of US goods. The Nikkei rallied 2.3% while the Shanghai Index and Hang Seng also registered impressive gains. For the DAX there would be gains of just under 100 points.

As mentioned, Thursday’s before NFP data can often be quiet. But the US session would at least liven up on the FX side. EURUSD broke the 1.0980 support I have been highlighting in my technical section, making a low of 1.0965, although would trade back to 1.0980 by the NY close. GBP continued to probe lower levels, dropping from 1.3000 to 1.2920 and USDJPY briefly touched 110.00 as USD strength prevailed for the second straight day. XAU also gained for the second straight day rallying to 1,568. This is not safe haven buying but more of a yield play as US yields struggle to rally. Wall Street would open higher with the DJ up over 100 points. A brief dip did see those gains wiped out but had recovered to +80 points by the close for a new record high. The S&P and Nasdaq would both close higher, although the Russell 2000, an index I did highlight recently, lagged down 0.27%. Uber announced their results after the bell, recording a cheeky $8.5 bio loss for the 2019 fiscal year. That was ‘good’ enough for the stock to rally over 2.5% in after hours trading. Go figure. All eyes now turn to 830 am EST Friday morning for the US NFP numbers. Wednesday’s ADP data has traders hopeful for a big number. +160k appears to be the average of economist's forecasts.

Showing technicals before arguably the most significant data release of the month can be a bit of a lottery. Get a much better or much worse release and we can slice through the best of technical indicators in quick time. So I’m going back to XAUUSD . As mentioned, despite the continued rally in equities and the USD, Gold has found a base sub 1,550 and looks determined to try elevated levels. Yes it will be dependent on tomorrow’s data. And yes you need to keep an eye on that rising trend line we broke through earlier in the week. That support now becomes resistance and as you can see from the chart, we stopped just shy of there today. Break back above and we could be looking at revisiting the highs from earlier in the month.

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