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Market Review: United States Non Farm Employment

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Market Review: United States Non Farm Employment

Market Review: United States Non Farm Employment

Economic calendar (highest volatility): 2nd April– 6th April 2018:

Timezone: (GMT -5:00) Eastern Time (U.S & Canada), Bogota, Lima

Fundamental:

In the previous week, the United States (U.S) Gross Domestic Product (GDP) was released and results exceeded expectations at 2.9% (Forecast: 2.7%).  There was some recovery seen in the U.S Dollar (USD) Index (DXY). The DXY was seen to recover by 100 points from the 88-ish level to the 89-ish level. Nonetheless, this is still a low level for the DXY; on an overall perspective, there still seems to be strong indications of a continuing downtrend. Delving deeper into accessing the USD personality at least for the start of this year, there seems to be some consistency in the ‘buy on rumour sell on fact’ play as formerly portrayed during the first U.S Federal Open Market Committee (FOMC) rate hike, suggesting that ‘protectionist’ and geopolitical issues are of a larger concern to the market compared to Interest Rate hike optimism. Formerly, U.S President Trump signed a memorandum imposing wide-ranging tariffs of up to U.S$60 billion on China and has imposed tariffs on steel and aluminium imports.

In regards to this week, there is a chance for another 'buy on rumour, sell on fact' move again for the USD approaching the end-of-the-week U.S March 2018 Non-Farm Employment Change (NFP) which is anticipated to bring about the most trading volatility. In addition to this, there are several other non-American economic releases which are viewed to bring about substantial trading volatility for the week namely the Reserve Bank of Australia (RBA) Cash Rate decision, the Canadian March 2018 Employment Change data, as well as the multiple Purchasing Managers Index (PMI) releases out of the United Kingdom (U.K). The team here at FintechFX view a relatively range-bound trading session to take place before the end-of-the-week U.S March 2018 NFP. 

Technical:

This week, the AUD/USD presents traders with some trading volatility as the Reserve Bank of Australia's (RBA) Interest Rate Decision (Cash Rate) is scheduled for review during the earlier half of the week. The Australian Dollar (AUD) in our opinion, is still highly undervalued and shows some signs of rising this 2018. In the light of a potentially more hawkish statement moving forward, markets are looking at the AUD/USD to regain some of it's strength which has been lost throughout the years. Therefore for this week, the team here at FintechFX view some opportunity to buy the AUD/USD targetting the key 61.8% Fibonacci resistance level. 

The GBP/USD can easily be crowned as one of 2018's star performer; the pair is seen to have recouped much of it's post-Brexit losses as indicated in the strong uptrend visible in the chart below. The Bank of England (BoE) has cautioned that akin to the U.S, the BoE may also raise Interest Rates faster than expected. This statement sparked some optimism for GBP/USD prices as this message was reaffirmed during the BoE Interest Rate Decision meeting last week; the markets are now pricing in for a rate hike to take place sometime this May 2018. The team here at FintechFX views that at least the "buy on rumour" move seems to be holding strong for now as indicated by the well validated support line as shown in the chart below. 

Formerly, the USD/CAD showed some pattern of a Wcykoff triggered sell-down. As formerly indicated, the Wyckoff sell move has since been reversed. Nonetheless, the team here at FintechFX view that the chart below shows some chance of a potential sell-down to take place following the inavailability of the USD/CAD to well surpass a key resistance level. This week, the Canadian March 2018 Employment Change data will come under scrutiny in which a favoring result, will largely benefit the CAD. 

 

Source (Charts): https://www.investing.com

Source (Economic Calendar): https://www.forexfactory.com/calendar.php

Contact Us: [email protected]

Economic Calendar by TradingView

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