For instant updates, follow FCI Markets on Twitter
Intermarket:
• SP Futures 4191 (-0.36%)
• EUSTXX 40981 (-0.12%)
• Crude Oil 68.70 (-0.15%)
• US 10YR 1.63% (+2.14%)
• EurUsd 1.2116 (-0.09%)
• UsdJpy 110.23 (-0.03%)
• DAX 15647 (-0.03%)
Positive surprises from initial jobless claims, ADP and services ISM, alongside President Biden’s willingness to compromise on tax hikes to get his infrastructure bill passed, spurred further FED tapering fears which sent US yields and the US Dollar up, and pressured risk assets. SP500 slipped 0.36% and VIX rose to 18.04. Fed’s Williams, while cautious, also supported taper talk. US10YR is up to 1.63% today. Gold is down, Oil is steady.
Bitcoin fell after Elon Musk’s tweet, Tron founder Justin Sun tweeted he will buy all the Bitcoin that Musk sells, no reaction to that
President Biden will be speaking on employment data at 10.15 EST.
Looking ahead: it’s all about US nonfarm payrolls today. Consensus is for 674k headline print, 5.9% Unemployment rate and 1.6% yoy Average Hourly Earnings in May versus 266k, 6.1%, and 0.7% in April. Fed’s Powell and ECB’s Villeroy are speaking at a climate conference while G7 finance ministers are also meeting in London today, ahead of the summit next week.
Matters that Matter:
• Biden proposes 15% corporate minimum tax; bans investment in dozens of Chinese defense and tech firms; outlines plan to quickly share 25 mln COVID-19 vaccines with world
• U.S. job growth likely picked up in May, worker shortages still a challenge
• NY Fed Williams – Now not the time to take action on tapering
• Australia’s Victoria detects Delta COVID-19 virus variant in latest outbreak
• Musk ‘trolling’ puts brakes on bitcoin’s rebound
Majors 1-Day View:
Comment: USD strength is the main theme going into Friday, after positive jobs data and further taper talk by Fed’s Williams. All eyes on NFP. NZD, AUD, GBP the weaker currencies.
USDJPY
Volatility expanded yesterday with prices posting gains of over ¾ Big Fig, closing above May highs. As such, signals are bullish for Friday but with some caution ahead of key event risk. Supports are found at yesterday’s Marabuzo at 109.96 and the 62% of yesterday’s rally at 109.86. Resistance levels are at the April 4 Top at 110.55 and the Mar/April highs at 110.72.
EURUSD
Prices settled below the recent 1.2160-1.2240 range on Thursday, signals switching to a bearish stance for Friday after losses of nearly 1 Big Fig. Resistance is found at today’s open at 1.2130, then yesterday’s Marabuzo at 1.2170. Support is found at the 13 May open at 1.2077, the 13 May low at 1.2050 and also the May 5 open at 1.2015. Caution is advised ahead of key risk event today.
AUDUSD
AUDUSD settled outside of the recent .7674-.7890 range on Thursday after posting a volatility expansion with the largest range since 12 May. As such, signals are bearish for Friday with some caution ahead of key risk event. Resistance is at yesterday’s Marabuzo at .7703 and Wednesday’s low at .7715. Supports are the Apr 13 close at .7642, the Apr 12 close at .7622 or even the Apr 13 low at .7586.
GBPUSD
Thursday’s bearish bias was proven correct, with prices posting the 2nd bearish engulfing this week, with losses of 1 Big Fig. As such, signals remain bearish fir Friday but with some caution as prices have not yet settled beyond the recent 1.4100-1.4200 range boundaries. Still, selling into rallies towards today’s open at 1.4107 or yesterday’s Marabuzo at 1.4140 is the preferred strategy. Supports are at the May 13 open at 1.4062 and the May 13 low at 1.4007 in proximity to the round number 1.4000.
USDCAD
With buyers returning from close to 1.2000 over the past weeks, prices found a base and posted a rally of almost 1 Big Fig on Thursday. As such, immediate signals have improved, but focus remains on the decisive contraction in volatility, highlighted by narrow Bollinger Bands. A daily close beyond 1.2142 is required to establish a clear bullish bias. In the short-term, buying into pullbacks towards the 62% of yesterday’s rally/13 SMA at 1.2065 is the preferred strategy. Resistance levels are prior week highs at 1.2142/44 and the May 13 close at 1.2176.
FX Relative ATR Grid
Comment: volatility expanded yesterday as market participants digested the better US employment data and positioned for a strong NFP report today. The expansion was in USD moves primarily, with contagion seen in other pairs.
FX Relative Strength Grid
Comment: the strongest trends are currently USD (bullish), AUD (bearish), NZD (bearish), JPY (Bearish). The strongest momentum was seen yesterday on USD (bullish), NZD (bearish).