Friday night saw the release of the latest US jobs print – the non-farm payrolls or NFP for May – which came in on expectations although revisions and internal numbers show building weakness from the start of the year. Wall Street didn’t care and bid across the board mainly due to relief that it wasn’t as dire as predicted and with the backdrop of potential trade deals developing after weeks of TACO indecision. Currency markets saw a reversion of strength back to the USD on firming of the Fed’s interest rate expectations with the Australian dollar again failing to breach the 65 cent level.
Oil prices have been building internal technical strength recently and the headline positive NFP print gave Brent crude an excuse to push above the $66USD per barrel level while gold was the most unfortunate of the undollars and was sold off to the low $3300USD per ounce levels.
Looking at stock markets from Asia from Friday’s session, where mainland Chinese share markets were in a holding pattern with the Shanghai Composite only up slightly in the afternoon session while the Hang Seng Index lost nearly 0.5% but still remains well above the 23000 point level.
The daily chart shows a near complete fill of the March/April selloff although momentum is now picking up again and remains slightly overbought as the 90 day “relief” continues without any further positive news. Watch for any crack below the low moving average or 23000 point level but this looks a potential breakout:
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Japanese inventory markets nonetheless bounced again on the weaker Yen with the Nikkei 225 transferring greater than 0.5% greater to 37741 factors.
Every day worth motion was trying very eager certainly though every day momentum has slowed down considerably this week after clearing resistance on the 36000 level degree with one other fairness market that appears stretched and able to rollover once more right here. Watch ATR assist intently which seems to be firming in latest periods:
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Australian shares have been unable to seek out any momentum with the ASX200 closing almost 0.3% decrease at 8515 factors.
SPI futures are up greater than 0.3% on the surge on Wall Avenue from Friday evening. The every day chart sample remains to be suggesting additional upside remains to be doable because the inverted head and shoulders sample is sort of full with the RBA minimize serving to increase this however correlation with different danger markets will come into play right here – watch as every day momentum is firming once more:
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European markets once more might solely managed some delicate returns as all eyes have been on the US jobs report because the Eurostoxx 50 Index completed simply 0.3% greater at 5430 factors.
Assist on the earlier month-to-month assist ranges (black line) at 5100 factors is now firmly held with the bounce off the 2024 lows on the 4400 level degree indicating a large fill of this dump and pump motion with the previous February highs almost full. A rollover might nonetheless be forming right here so look ahead to assist on the 5200 level degree correct:
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Wall Avenue nonetheless rebounded throughout the board with the NASDAQ closing greater than 1.2% greater whereas the S&P500 completed up 1% at 6000 factors precisely.
The 4 hourly chart was beforehand supporting a possible slowdown motion right here that may very well be translating to a prime on the every day chart as costs attempt to get again above the pre-Trump Tariff Tax day. This was once more trying like a TACO commerce as resistance appeared weak overhead though the potential for commerce offers may give some extra assist.
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Foreign money markets stay largely on development towards King Greenback amid the tariff/X/commerce deal/US price range invoice chaos however there was a small reprieve after the NFP print primarily resulting from a repricing within the Fed funds price. This noticed a gentle transfer again in the direction of the USD with Euro slipping again beneath the 1.14 degree after breaching the 1.15 deal with earlier within the week.
The union forex was pushed again beneath the 1.13 deal with beforehand however assist bounced again on the 2023 and 2024 highs with a breakout above trailing ATR resistance on the 4 hourly chart nonetheless underway. Medium time period momentum stays very constructive right here however look ahead to a possible pullback to the mid 1.13 degree once more:
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The USDJPY pair had a small rebound within the earlier session after which pushed greater once more on Friday evening to make a brand new weekly excessive just under the 145 degree.
I nonetheless contend we have to look ahead to any sustained break beneath the 139 degree which completes a multi yr bearish head and shoulders setup that might see the 110 to 120 degree revisited. So regardless of this quick time period transfer on a possible commerce deal, I’m nonetheless watching quick time period assist that might come below strain right here once more:
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The Australian greenback had been pushed down on USD resurgence after blasting by way of the 65 cent degree beforehand however stays unable to push above the earlier breakout highs though the medium time period image nonetheless seems fairly agency.
Stepping again for an extended viewpoint (and searching on the trusty AUDNZD weekly cross) worth motion has remained supported by the 200 day MA (transferring black line) after bouncing off a close to new 5 yr low. Regulate short-term assist on the 63 cent degree however that is nonetheless trying promising for the Pacific Peso:
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Oil markets at the moment are constructing after attempting arduous to get again on monitor with a constructive response to Friday’s NFP report seeing Brent crude pushed above the $66USD per barrel degree for a number of weeks.
The every day chart sample exhibits the submit New Yr rally that acquired a little bit out of hand and now reverting again to the sideways decrease motion for the latter half of 2024. The potential for a return to the 2024 lows remains to be constructing right here as home demand within the US is more likely to proceed to say no because the Trump Taxes take impact however look ahead to any breakout above the $66-67 zone:
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Gold was transferring like the opposite undollars towards USD after discovering some stability final week however suffered probably the most on Friday evening with a steep fall again to the low $3300USD per ounce degree after not too long ago virtually breaking above $3400USD per ounce degree.
Brief time period assist had firmed immensely in latest periods displaying actual energy however momentum turned significantly overbought so this was inevitable as worth motion has reverted again to the uptrend line from the April lows. This line had appeared damaged however may very well be a false constructive on short-term USD energy?
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Glossary of Acronyms and Technical Evaluation Phrases:
ATR: Common True Vary – measures the diploma of worth volatility averaged over a time interval
ATR Assist/Resistance: a ratcheting mechanism that follows worth beneath/above a development, that if breached exhibits above common volatility
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CCI: Commodity Channel Index: a momentum studying that calculates present worth away from the statistical imply or “typical” worth to point overbought (far above the imply) or oversold (far beneath the imply)
Low/Excessive Transferring Common: rolling imply of costs on this case, the high and low for the day/hour which creates a band across the precise worth motion
FOMC: Federal Open Market Committee, month-to-month assembly of Federal Reserve relating to financial coverage (setting rates of interest)
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DOE: US Division of Vitality
Uncle Level: or cease loss level, a degree at which you’ve clearly been improper in your place, so cry uncle and get out/improper in your place, so cry uncle and get out!
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