{"id":9967,"date":"2010-06-04T07:59:38","date_gmt":"2010-06-04T11:59:38","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2010\/06\/04\/non-farm-payrolls-could-further-usd-bullishness\/"},"modified":"2010-06-04T07:59:38","modified_gmt":"2010-06-04T11:59:38","slug":"non-farm-payrolls-could-further-usd-bullishness","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/06\/04\/non-farm-payrolls-could-further-usd-bullishness\/","title":{"rendered":"Non-Farm Payrolls Could Further USD Bullishness"},"content":{"rendered":"

Source: <\/strong>Forex Yard<\/a><\/strong> <\/strong><\/p>\n

Ahead of the US Non-Farm Payroll data, expected at 12:30 GMT today, the Dollar seems to be trading on the upside. The forecast has put American employment into a healthy increase for the previous month, with a concurrent drop in the official unemployment rate alongside it. The NFP is expected to show an increase of over 500,000 jobs last month. Should the figure come in near what is expected, the USD will likely see a gratuitous increase given the risk averse climate currently in play.<\/p>\n

Economic News<\/h2>\n

USD – USD Outpacing Majors; NFP Should Help Advance Gains<\/h3>\n

The US Dollar advanced against all of its primary currency rivals yesterday, gaining modestly against the EUR, JPY, GBP, AUD, and NZD primarily. A downturn in US stocks towards the end of the day helped to fuel another surge of risk aversion in the forex<\/a> market. The result has been a steady boost to the USD, a decline to stocks, and falling commodity prices, albeit only slightly.<\/p>\n

Against the EUR, the greenback returned to the 1.2155 price level before turning back slightly for a current price near 1.2175. Versus the Yen, the buck has only seen steady improvement, with the price floating strongly above 92.50. Gains similar to that seen against the EUR can be seen against almost all of the other currency rivals.<\/p>\n

Ahead of the US Non-Farm Payroll data, expected at 12:30 GMT today, the Dollar seems to be trading on the upside. The forecast has put American employment into a healthy increase for the previous month, with a concurrent drop in the official unemployment rate alongside it. The NFP is expected to show an increase of over 500,000 jobs last month. Should the figure come in near what is expected, the USD will likely see a gratuitous increase given the risk averse climate currently in play.<\/p>\n

EUR – EUR Appears Poised for Losses Following Today’s NFP Report<\/h3>\n

The Euro appears to be continuing the losses it has been experiencing since the Greek debt crisis began a few months back. Given the decision to put forth a financial bailout for struggling economies in the region, many would expect the EUR to be in a corrective posture, yet this does not seem to be the case.<\/p>\n

Against the US Dollar, the 16-nation single currency has remained at all-time lows and currently trades near 1.2175. The EUR\/GBP has been devastated by a sustained drop which currently puts the price just over 0.8300. Versus the Yen the EUR appears to be doing well, matched only because of Japan’s recent political crisis. The EUR\/JPY, as a result, is currently trading for 112.75, up slightly from the 112.05 seen earlier today.<\/p>\n

Most of today’s market expectations lie not within the Euro-Zone, but rather in North America. Canada and the United States will both be publishing their employment figures. The US Non-Farm Employment Change report will be released, alongside the American official unemployment rate, at 12:30 GMT. This will come after Canada releases similar figures, however. The US is expected to publish figures which are substantially higher than last month’s. Should this be the case, we may see the USD continue to gain steadily against its primary rivals, particularly the EUR.<\/p>\n

JPY – Yen Trading Lower as Investors Bank on Positive NFP<\/h3>\n

The Japanese Yen (JPY) appears to be on the selling side of many trades recently. The island currency has suffered deep losses to a number of its primary rivals, primarily the British Pound and US Dollar. Against the Pound, the JPY has plummeted and currently trades at 135.75 after coming down from 136.50 – a 3-week high for the pair – earlier this morning.<\/p>\n

Asian stocks saw modest gains yesterday, and currencies in the region appear to be in decline as a result. If the NFP data from the US today can spur market optimism traders may see a continuation to the trend of rising equities. Many investors are expecting a strongly positive NFP report and this fact is being priced in. So long as the release is in line with expectations, more or less, we should see the JPY continue its recent decline. If risk aversion returns in force, however, the Yen may yet become resurgent.<\/p>\n

Crude Oil – Oil Prices Rebounding Amid Speculation of Market Reversal<\/h3>\n

Despite a strengthening US Dollar, Crude Oil prices appear to be on the rise. Many investors have expressed a more long-term perspective on the oil spill in the Gulf of Mexico and anticipate rising oil prices in the near future. This speculation combined with a sudden draw-down in US oil inventories helped this commodity to gain sharply in last minute trading yesterday.<\/p>\n

The sentiment that oil prices will rise does have merit. Even while oil prices were dropping sharply amid the Greek bailout crisis in Europe, a large number of commodity speculators were counting on a quick rebound. Once momentum turned in favor of this notion, a band-wagon effect took place and we’ve seen Crude Oil rebound to trade just under $75 a barrel, up from $67 just a few days ago.<\/p>\n

However, if today’s NFP figures prove positive, we should see the USD gain strength and put some pressure on Crude Oil to correct downwards a bit through mid-day trading.<\/p>\n

Technical News<\/h2>\n

EUR\/USD<\/h3>\n

The pair has recorded much bearish behavior yesterday. However, the technical data indicates that this trend may reverse anytime soon. For example, the 4-hour chart’s Stochastic Slow signals that a bullish reversal is imminent. An upward trend today is also supported by the daily chart’s RSI. Going long with tight stops may turn out to pay off today.<\/p>\n

GBP\/USD<\/h3>\n

The 4-hour chart is showing mixed signals with its RSI fluctuating in neutral territory. However, there is a bullish cross forming on the weekly chart’s Slow Stochastic, indicating a bullish correction might take place in the nearest future. Going long might be a wise choice.<\/p>\n

USD\/JPY<\/h3>\n

The price of this pair appears to be floating in the over-bought territory on the 4-hour chart’s RSI indicating a downward correction may be imminent. The downward direction on the daily chart’s Slow Stochastic also supports this notion. When the downwards breach occurs, going short with tight stops appears to be preferable strategy.<\/p>\n

USD\/CHF<\/h3>\n

The pair has been range-trading for a while now, with no specific direction. The Daily chart’s Slow Stochastic providing us with mixed signals. All oscillators on the 4 hour chart do not provide a clear direction as well. Waiting for a clearer sign on the hourlies might be a good strategy today.<\/p>\n

The Wild Card<\/h2>\n

Gold<\/h3>\n

Gold prices have dropped significantly yesterday and peaked at $1206.90 an ounce. However, on the 4-hour chart RSI is floating in an oversold territory suggests that a bullish correction is impending. This might be a great opportunity for forex traders to enter the trend at a very early stage.<\/p>\n

Forex Market Analysis<\/em> provided by\u00a0Forex Yard.<\/a><\/strong><\/p>\n

\u00a9 2006 by FxYard Ltd<\/p>\n

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.<\/p>\n","protected":false},"excerpt":{"rendered":"

By ForexYard – Ahead of the US Non-Farm Payroll data, expected at 12:30 GMT today, the Dollar seems to be trading on the upside. The forecast has put American employment into a healthy increase…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-9967","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9967","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=9967"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/9967\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=9967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=9967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=9967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}