Review of Yesterday’s Markets
The OPEC meeting and the US JOLTS job vacancies, which were projected to drop below 10 million and did, were the main topics of conversation among traders yesterday. The most encouraging news was provided by other data that demonstrated the United States economy’s robust expansion. Since the ADP employment data was better than expected, today’s non-farm payrolls report has a good chance of likewise exceeding expectations for the 15th month running. Consumer confidence is high, and the Federal Reserve may decide to raise interest rates further, as evidenced by a robust ISM services index.
A negative reaction was seen in the bond market at first, with rates on 2-year bonds rising to 5.15%, a level not seen since March. In the end, though, they closed at a level below 5%, a sign that investors may be wary of the non-farm payrolls report and the consumer price index data due out the following week. Following an early period of strength, the US dollar lost ground against the Euro and the British Pound as those currencies proved resilient. The Canadian dollar (CAD) and other commodity currencies saw little to no upward movement. While some of these currencies saw small increases within a 20-pip range, others, like the CAD, had no substantial rebound at all.
Assumptions in Today’s Market
To further illustrate the state of the labor market, the United States will release additional employment figures today following yesterday’s ADP Non-Farm Employment Change, Unemployment Claims, and JOLTS Job Openings. While data was scarce in Asia and Europe, the United States is likely to see a drop in the unemployment rate to 3.6% and a slowing in the Non-Farm Employment Change of more than 100K. However, new hires are anticipated to produce a net beneficial impact on Canada’s unemployment rate.
A New Look at Forex Signals
In contrast to the rapid swings in price that occurred after the release of US economic data, yesterday’s trading was rather calm for the majority of the day. The ADP jobs report sparked a resurgence of volatility, and we took advantage of it by entering multiple profitable trades (with the exception of a sell order we accidentally placed on USD/CAD). After that, the turbulence gradually subsided.
Dropping Gold Prices Again
Gold has been making lower lows for the past two months, despite a weakening USD. By midweek last week, Gold’s price had dropped below $1,900; however, following the announcement of tame US inflation statistics and the formation of a doji candlestick at the bottom, Gold’s price quickly reversed higher. Yesterday, following the release of encouraging employment data from ADP, the price dropped to $1,903.11 from a high of $1,930 earlier in the week. Buyers had failed to break the 100 SMA (green), which continues to act as resistance.
XAU/USD – 240 minute chart
AUD/USD Continues to Fall
As weak growth in China became more apparent and risk sentiment softened on chances of the FED continuing to hike interest rates, the AUD/USD became negative three weeks ago. We turned bearish on this pair after seeing a retrace upward last week, but sellers returned on Wednesday, and the price dropped 90 pips yesterday.
AUD/USD – 240 minute chart
Coin Status Report
Bitcoin Price Holds Near Range
Following the crypto market rally in June as investor sentiment turned bullish, Bitcoin has been trading in a $31,000 to $31,500 range. The Bitcoin/US Dollar exchange rate hit a new annual high yesterday, rising above $31,500. It appears that the range is still holding for BTC, despite the fact that the price has had trouble holding the gains and has reversed lower.
BTC/USD – 240 minute chart
Should ETHEREUM Keep Its Support Near the 100-Day Simple Moving Average?
In the middle of this past month, there was a significant increase in the value of cryptocurrencies, with the ETH/USD pair surpassing the $1,900 mark. Yet it never did make up to our predetermined take-profit target, and instead started falling back. Following a period of stability, the price began to fall. The 50-day Simple Moving Average (SMA) gave support at first, but it was eventually breached. Thankfully, the slide was halted by the 200-day SMA, functioning as support, and the price has since risen back above all MAs. We’re witnessing a pullback right now, but it will be interesting to watch if the 100 SMA continues to act as support.
