US May employment data on Friday night shocked the market, printing only 38k new jobs, well below 160k forecast and lower than even the most pessimistic forecast. The 38k print is the lowest since September 2010. Adding to injury, prior two months was revised 59k less than previously reported which means the past three months averaged 116k jobs gain, below the 200k+ average the market looks for. Unemployment rate fell to 4.7% but this is driven by exodus from the labour force, indicating people looking for work are giving up. The US Fed rate hike pricing significantly reduced to June 6% and July 27%. The FX market reaction was violent; the Australian Dollar rosed initially to 0.73 and continued to trend higher to 0.7365. Next major resistance is 0.74-0.7450.
Fed Chair Yellen is speaking tonight with economic outlook and monetary policy on the agenda. With growing optimism from recent hawkish rhetoric from Fed members and Yellen herself, how she will respond and change her remarks given the shocking NFP data is one the market will be closely watching. RBA is due to meet tomorrow, with expectation that rate remains on hold. Changes in the statement will be analysed to see whether the recent strong GDP numbers are mentioned and maintain the clear easing bias given low inflation. Delay in the US rate hike would place more pressure for the RBA to set a clear easing bias and cap the Australian Dollar.
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Trade AUD/USD Intraday: the bias remains bullish.
Pivot: 0.7290
Our preference: long positions above 0.7290 with targets @ 0.7370 & 0.7410 in extension.
Alternative scenario: below 0.7290 look for further downside with 0.7230 & 0.7200 as targets.
Comment: technically the RSI is above its neutrality area at 50.
Supports and resistances:
0.7445
0.7410
0.7370
0.7344 Last
0.7290
0.7230
0.7200
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Trade AUD/NZD intraday: rebound towards 1.0640 |
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Our pivot point stands at 1.0570.
Our preference:rebound towards 1.0640.
Alternative scenario: the downside breakout of 1.0570 would call for 1.0550 and 1.0540.
Comment: the RSI is below 50. The MACD is above its signal line and negative. The configuration is mixed. Moreover, the pair is trading under both its 20 and 50 MAs (respectively at 1.0595 and 1.0648).
Supports and resistances:
1.0670 **
1.0650 *
1.0640 **
1.0630
1.0592 last
1.0580
1.0570 **
1.0550 *
1.0540 **
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Trade USD/JPY Intraday: the downside prevails. |
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Pivot: 107.95
Our preference: short positions below 107.95 with targets @ 105.70 & 105.10 in extension.
Alternative scenario: above 107.95 look for further upside with 108.50 & 109.10 as targets.
Comment: the RSI has broken down its 30 level.
Supports and resistances:
109.10
108.50
107.95
106.51 Last
105.70
105.10
104.25
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Trade S&P 500 (CME) (M6) Intraday: rebound.
Pivot: 2083.00
Our preference: long positions above 2083.00 with targets @ 2106.00 & 2113.00 in extension.
Alternative scenario: below 2083.00 look for further downside with 2077.00 & 2070.00 as targets.
Comment: the RSI is mixed to bullish. An intermediary support area set at 2083 allows for a temporary stabilization.
Supports and resistances:
2121.00 **
2113.00 **
2106.00 **
2089.25 Last
2083.00 ***
2077.00 **
2070.00 **
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