US NFP on Friday | Market Outlook, Apr 2nd, 2018

Market Outlook

US NFP on Friday

Dollar came back fighting, rate differential the main reason why dollar was picked up. With Fed raising rates and other central banks still shying away from raising rates markets were selling lesser yield currencies to pick up higher yielding dollar.

Gold tested its resistance at 1350 again and failed at it yet again. Trade wars and geopolitical tensions didn’t flare up as expected and gold bulls were unable to keep up their pressure. Gold hit a low of 1321 before closing at 1325.

EURUSD hit a high of 1.2477 before sellers returning. EURUSD closed the week at 1.2320 down just 20 pips for the week that was curtailed to 4 days due to Easter break.

GBPUSD too was a casualty of dollar strength as it fell 130 pips to end the week at 1.4018.

Rate differential boosted dollar as USDJPY reclaimed the 105.50 support level and closed strongly at 106.28 after making a high of 107.00 during the week.

Dollar last week didn’t heed to domestic US economic indicators that were mixed last week. US GDP came out strong but Core PCE, Chicago PMI and unemployment claims were a disappointment but were largely ignored by the market.

Next week sees the all-important US NFP data getting released on Friday.

Gold is stuck in the broad range of $1210-$1256 with no trigger in sight that could break either level. Continuing dollar strength would provide a challenge for the bulls but bias for Gold continues to be to the upside.

EURUSD has failed repeatedly in its attempt to break the 1.2500 handle and no sits very close to the support at 1.2300. Expect EURUSD to hold this level and challenge 1.2400 again, a break of 1.2300 or rather 1.2280 would open up move towards 1.2230 and even 1.2170. No crucial economic releases are due from Europe in the coming week.

GBPUSD is well placed in a rising trend line with support coming in at 1.3900 and resistance lying at 1.4250.

USDJPY gave a strong closing last week and now should aim to regain the 107 level one again with resistance coming in at 106.85 and support at 105.50.

USDCAD has broken the uptrend it was in since February ‘18 and now rests at the crucial support of 1.2900. A break of 1.2900 would open up a move to 1.2800 and even 1.2700. On the economic data front we have Canadian jobs data on Friday that would be crucial and also important would be news about NAFTA talks.

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