FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
FxPro information and reviews
FxPro
88%
OctaFX information and reviews
OctaFX
86%

Non-Farm Payrolls: Marquee Macro Event of the Week


8 October 2021

Indicators are pointing to some solid gains for September. Let's take a look below at what you need to know. As the upside price action in natural gas fades no longer hogging the limelight of financial markets’ attention, focus now shifts towards Friday’s NFP number. The ADP private payroll number out on Wednesday was solid coming in at 568k, above the 430k expectation and up on last month’s 340k print. Job growth rose across every sector with Leisure and Hospitality leading the charge. As the virus moves to the rear view mirror and stimulus cheques expire people will naturally come back into the workforce.

This portends well for successive months’ jobs numbers. Initial claims beat expectations of 348k coming in at 326k, improving on last week’s 364k. So all the preliminary data so far is pointing to a good number tomorrow, I guess we’ll have to see.

I’ll be looking at the participation rate and hourly wage figures (which will feed through into inflation) as well as the headline number. Although the language was non-committal, the market as well as myself are now expecting a November taper (definitely before year end). So as long as the numbers tomorrow don’t miss on the downside by a severe magnitude then we should be good to go for a November taper. A strong number on the upside should feed through to strength in the dollar. The expectation is for a 500k gain for the month of September up from the weak August 235k gain. It could be a bit of a damp squib to be honest with a muted reaction from markets if numbers print in close proximity to consensus. If we do see volatility the assets where we’d see movement would be – the dollar, EURUSD, USDJPY, Gold and bonds (not an exhaustive list). I’ll pull up the charts below to give a read on where we stand heading into this event.

DXY

The dollar has been on a tear, finally breaking out from its 93.2 - 89.65 range. Price has been moving higher and higher within its ascending channel, supported by the 21-day EMA as price dips lower. Both moving averages are pointing upwards showing momentum is bullish. The RSI has rebounded off the 55 level and is nearing overbought territory again. Targets wise - on the upside 94.5 would be my initial target, beyond there 95 would come into play. On the downside, zones I'd be paying particular attention to would be the 21-day EMA and the 93.2 former resistance just above the 50-day SMA.

EURUSD

The euro has been weak since the German Election results. Price tried to rally above the 1.16 level, but has again been pushed down lower to the mid 1.15 region. The moving averages all indicate bearish momentum for EURUSD. The RSI, however, is indicating negative divergence with price and is in oversold territory. Shorting the rallies would be the right way to play EURUSD. On the upside I'd monitor 1.16 and 1.17 just above the 21-day EMA (been working well to cap rallies). On the downside, 1.15 would be the zone I'm looking towards.

EURUSD The RSI indicating negative divergence with price and is in oversold territory

USDJPY

Price has rebounded off the 110.8 resistance now acting as support. The surge in US yields helped catalyze the strong move off the 109.1 range support. There's still room for USDJPY to run further looking at where the RSI is currently. Targets wise, for bulls the former high of 112 would be a good target. On the downside, 110.8 just above the 21-day EMA would be prudent to monitor.

Gold

Gold has been under pressure now since it topped out at $1830. It doesn't look like conditions are going to improve for the shiny metal either any time soon. The 21-day EMA has been capping price rallies. The RSI is below the 55 level and has rolled over. Targets to have on your radar are $1775 and $1800 on the upside (both near the 50-day SMA and 200-day SMA). On the downside if price breaches the $1750 level then $1725 would be next up.

iShares 20+ year Treasury Bond ETF (TLT)

TLT is looking ripe for some movement with the excitement we’ve seen in yields. It's important to remember the inverse relationship between yields and bond prices. So if you expect a strong jobs number, yield should be biased to move higher which should pressure price lower. The chart here is the daily for the 20+ year treasury bond ETF. The longer the term of the bond the more sensitive price movement is to moves in yields. Price has sliced through the 145 support level and is eyeing the 140 level below. Price is below its 200-day SMA, indicating a bearish signal for price. The RSI is close towards oversold so a rally back towards the 200-day SMA could maybe set up a more aggressive move lower for sellers.

#source

Share:


Related

Stock Futures Trade Higher
Stock Futures Trade Higher

Following the Omicron news and the Fed Chair indicating the speed up of tapering, prices of cryptocurrencies have also taken a beating, with Bitcoin...

1 Dec 2021

Stock futures rise while investors monitor new Covid variant
Stock futures rise while investors monitor new Covid variant

On Monday, in early morning trading, stock futures climbed higher after Black Friday’s heavy sell-off while investors monitored the newest developments...

29 Nov 2021

The New Covid Strain And The Run Up To Christmas
The New Covid Strain And The Run Up To Christmas

Investors and traders are concerned about the new Covid-19 strain discovered in South Africa. The World Health Organization is keeping an eye on a new variant...

26 Nov 2021

Stock Futures Point A Lower Open
Stock Futures Point A Lower Open

European stock futures are pointing to a higher open on Thursday while investors continue to closely follow the surge in Covid cases and political developments in Germany...

25 Nov 2021

Oil continues to correct the rise of the previous 12 months
Oil continues to correct the rise of the previous 12 months

Oil is adding around 1% on Monday after posting the 4th week of back-to-back decline, during which WTI lost almost 12%, and Brent nearly 11%. Nevertheless...

23 Nov 2021

Cryptocurrencies in FinTech
Cryptocurrencies in FinTech

Over the past few years, cryptocurrencies have had a big impact on the global financial niche. Although Bitcoin and most other cryptocurrencies have declined...

22 Nov 2021


Editors' Picks

HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
AvaTrade information and reviews
AvaTrade
76%
LegacyFX information and reviews
LegacyFX
75%
FP Markets information and reviews
FP Markets
72%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.