U.S. Non- Farm Payrolls Expected at 238K

Forex Signals Brief July 7: All Eyes on the NFP After Yesterday’s ADP Employment

Posted Friday, July 7, 2023 by
Skerdian Meta • 3 min read

U.S. Non- Farm Payrolls Expected at 238K

Yesterday’s Market Wrap

Yesterday traders were focused on the OPEC meeting and US JOLTS job openings, which were expected to fall below 10 million, which they did. Although the highlight came from other data, which showed that the US economy continues to experience strong growth. The ADP jobs report was surprisingly robust, suggesting that the non-farm payrolls report today might also beat expectations for the 15th consecutive month. In addition, the ISM services index showed strength, indicating that the consumer is strong and the possibility of further rate hikes by the FED.

Initially, the bond market reacted negatively, with 2-year yields reaching 5.15%, surpassing the previous high in March. However, they eventually closed just below 5%, indicating that the market may be cautious or skeptical ahead of the non-farm payrolls report and next week’s CPI data. The US dollar initially strengthened but later retraced its gains against the Euro and the GBP as these currencies demonstrated resilience. On the other hand, commodity currencies, such as the CAD, had limited upward movement, with some experiencing minimal gains within a 20-pip range, while others, like the CAD, did not see any significant bounce at all.

Today’s Market Expectations

Today we have more employment reports from the US, after yesterday’s ADP Non-Farm Employment Change, Unemployment Claims and JOLTS Job Openings, which will further show the shape of the labour market. The Asian session was light regarding the data and so is the European session, but in the US session, we have the Non-Farm Employment Change which is expected to cool off by more than 100K, while the unemployment rate is expected to tick lower to 3.6%. In Canda, the unemployment rate is expected to tick higher instead to 5.3%, while new hiring is expected to turn net positive.

Forex Signals Update

Yesterday the price action was slow for most of the day apart from a few hours when the US economic data was released. The volatility returned after the ADP employment numbers and we pull several trades, all of which closed in profit, apart from the USD/CAD which we really meant as a buy trade. Then the volatility faded after that.

GOLD Takes Another Leap Down

Gold continues to make lower lows for two months, despite a weak USD. By the middle of last week, the price of Gold fell below $1,900 but swiftly reversed higher after the release of soft inflation data from the US and the formation of a doji candlestick at the bottom. Earlier this week, the price rose above $1,930 but later reversed lower after buyers failed to break the 100 SMA (green) which remains as resistance and yesterday we saw a dive to $1,903.11 after the strong ADP employment numbers.

XAU/USD – 240 minute chart

AUD/USD Resumes the Decline

AUD/USD turned bearish three weeks ago as the signs of sluggish growth in China became more evident and risk sentiment turned softer on prospects of the FED continuing to raise interest rates. Last week we saw a retrace higher, but sellers returned on Wednesday and yesterday this pair took a 90 pip dive, so we have turned bearish on this pair.

AUD/USD – 240 minute chart

Cryptocurrency Update

BITCOIN Remains Within the Range

Bitcoin has been trading in a range that ranges from around $31,000 to $31,500 after cryptocurrencies surged in June as the sentiment turned bullish in the crypto market. Yesterday, BTC/USD made a new high for the year after we saw a surge above $31,500. However, the price has encountered difficulties in holding the gains, and we saw a reversal lower, but it seems like the range is still holding for BTC.

BTC/USD – 240 minute chart

Will the 100 Daily SMA Hold As Support for ETHEREUM?

By the middle of last month there was a notable surge in cryptocurrencies, with the ETH/USD pair rising above the $1,900 level. However, it failed to reach our predetermined take-profit target and subsequently began to retreat lower. Following a period of consolidation, the price started to decline. Initially, the 50-day Simple Moving Average (SMA) provided support, but it was eventually broken. Fortunately, the decline was halted by the 200-day SMA, acting as a support level and the price bounced above all MAs again. Now we are seeing a retreat although let’s see if the 100 SMA will hold as support.