Daily Market Review — 08/02/2016
The markets are still under the pressure because of US NFP report
The US dollar strengthened against the Japanese currency during Friday’s session. This is due to mixed data on the US labor market. Thus, the NFP figure came in at 151 thousand against the forecast of 190 thousand. Nevertheless, the unemployment rate in January fell unexpectedly to a level of 4.9% instead of the expected 5%. Thus, average hourly earnings increased by 0.5% against expectations of experts at the level of 0.3%. This indicates a positive trend in the US labor market. The current dynamics of the pair will completely depend on Friday’s US unemployment data, as the economic calendar is empty today. Some influence provided Japan Economy Watchers Current Index, which were slightly worse than forecasts of experts. Most likely, the US dollar will continue to grow today.
Resistance: 117.65, 118.24, 119.08
Support: 116.49, 115.97, 115.51
In tandem with the Canadian dollar US currency also showed strong growth at the end of Friday’s trading day. This trend was caused by the positive US labor market data. The Canadian labor market data, which also were released on Friday, disappointed market participants. The unemployment rate in Canada rose to 7.2% against an average forecast of 7.1%. At the same time the number of employed fell by 5,700, against the expectations of increase on 5500. In addition, oil prices’ drop also provided some pressure on the Canadian currency. Today, the dynamics of the pair may be affected by the publication of Canada housing starts and building permits, which will be presented at 13:15 (GMT) and 13:30 (GMT), respectively.
Resistance: 1.3907, 1.4096, 1.4242
Support: 1.3757, 1.3637, 1.3514
European stock markets showed a negative trend at Friday’s session, due to mixed statistics on the US labor market. So, in January, it was created fewer jobs than expected. Let us remind that labor market data are important for US Federal Reserve when it comes to decision on interest rate changes. Due to the negative US economic data that have been published in recent years, investors do not expect a rate hike at the meeting in March. Also, some pressure had data on factory orders in Germany, which fell more than as of December than it had expected the. Today, the dynamics of trade can be affected by the publication of data on industrial production index in Germany, which were presented at 07:00 (GMT).
Resistance: 5892.76, 5957.77, 6013.49
Support: 5782.48, 5730.23, 5688.44
Prices for precious metals dropped after the release of US labor market data on Friday followed by the strengthening of the US currency. But then, gold recovered all the losses. Support for gold provided expectations that the Fed will not raise rates in March. Today’s dynamics will entirely depend on the situation on the stock and commodity markets. Investors often use gold as a safe asset. Nevertheless, the Chinese New Year had a very small impact on the level of demand in Asia.
Resistance: 1174.39, 1182.73, 1191.32
Support: 1160.30, 1145.37, 1127.47