Non – Farm Payrolls disappoints as further slowing economic growth in the US reverses recent dollar rallies. AUD slides on the back of widening Trade Balance
CURRENCY TRADING SUMMARY – 07 MAY 07 (23:30GMT)
- U.S. Dollar Trading (USD) ended its previous three straight day of strength on Friday as Non-Farm Payrolls was released weaker than expected. With markets already awaiting a poorer figure, the actual figure was released softer than consensus at 88k (Forecast: 100k) with the previous revised lower at 117k. The jobs data for April was in fact the lowest number seen since November 2004, which supported the argument that the U.S. economic slowdown is spreading to the labor market giving further indication for an interest rate cut by the Federal Reserve later this year, ending early week rebounds for the dollar with strong Manufacturing and Services data. In related news, Unemployment rate rose to 4.5% as forecasted further hindering the USD. In US share markets, the NASDAQ was up 6.69 points (+0.26%) whilst the Dow Jones was also up by 23.34points (+0.18%). Crude oil fell by US$1.53 to US$61.66 a barrel.
- The Euro (EUR) found ground above the 1.3600 level once again due to a broadly weaker dollar as Retail sales for the EZ came in on consensus at 0.5% (Previous revised higher at 0.4%). In other data, services PMI for the month of April eased slightly to 57 coming lower than expectations of 57.6, yet markets did well to shrug off the data. Overall the Euro traded with a range of a low 1.3535 and a high of 1.3611 before closing the day at 1.3597. In other news the results of the Presidential Election are in, with Conservative Nicolas Sarkozy wining the ballot over Socialist Segolene Royal on Sunday. In a statement the newly elected French President pledged his allegiance to Europe saying “Tonight France is back in Europe” and further more indicated that ties with the United States would be strengthened.  
- The Japanese Yen (JPY) despite market holiday the JPY strengthened against the USD on the back of poor Payrolls data. Overall the JPY traded with a range of a low 119.90 and a high of 120.47 before closing the day at 120.13. Looking ahead the minutes of the BoJ March meeting will be made public.  
- The Sterling (GBP) rallied against a broadly weaker dollar, as further data out of the US indicated slowing growth, whilst plenty of market sentiment surrounds a rate hike by the BoE later on this week. Overall, the GBP traded with a range of a low 1.9845 and a high of 1.9944 before closing at 1.9931 in the New York session. Looking ahead, Monday will see a market holiday for the UK, where thin trading may be expected.
- The Australian Dollar (AUD) slid during the Asian session with a further widening of the trade balance to -1661 mio (Previous: – 838 mio) although consensus was an expectation of -1000 mio. Furthermore exports fell by to – 4% largely due to a strong Aussie Dollar in recent weeks. The AUD however the regain some of its losses during the New York session as poor Payrolls pushed the currency back over the 0.8200 level. Overall the AUD traded with a range of a low 0.8172 and a high of 0.8236 before closing the day at 0.8210 in the New York session.        
- The South African Rand (ZAR) firmed to a new four-month high against the dollar on Friday, supported by continuing strong investor appetite for risk and solid metals prices.
- Gold (XAU) strengthened in response to a weaker dollar, rising by US$5.30 an ounce to $689.70.   
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.3490 | 1.3534 | 1.3600 | 1.3623 | 1.3683 |
| USD/JPY | 119.06 | 119.50 | 120.10 | 120.54 | 121.65 |
| GBP/USD | 1.9823 | 1.9843 | 1.9935 | 1.9948 | 2.0076 |
| AUD/USD | 0.8150 | 0.8170 | 0.8210 | 0.8243 | 0.8264 |
| XAU/USD | 663.85 | 667.80 | 689.00 | 690.92 | 693.80 |
- Euro 1.3600
Initial support at 1.3534 (May 4 low) followed by 1.3490 (23.6% retracement of the 1.2865 to 1.3683 advance). Initial resistance is now located at 1.3623 (May 3 high) followed by 1.3683 (Apr 27 trend high)
- Yen 120.10
Initial support is located at 119.50 (May 2 low) followed by 119.06 (May 1 low). Initial resistance is now at 120.54 (76.4% retracement of the 122.20 to 115.15 decline) followed by 121.65 (Feb 22 reaction high).
- Pound – 1.9935
Initial support at 1.9843 (May 4 low) followed by 1.9823 (Former resistance from Apr 3) Initial resistance is now at 1.9948 (May 3 high) followed by 2.0076 (May 1 high)
- Australian Dollar – 0.8210
Initial support a 0.8170 (May 4 low) followed by 0.8150 (Apr 9 low). Initial resistance is now at 0.8243 (May 4 high) followed by 0.8264 (May 3 high)
- Gold – 689.00
Initial support at 667.80 (May 2 low) followed by 663.85 (Apr 4 low). Initial resistance is now at 690.92 (May 4 high) followed by 693.80 (Apr 23 high)
