Forexlive Americas FX news wrap: USD moves higher ahead of the US jobs report
Forex news for North American trading on July 1, 2021
- IMF's Georgieva says once a country gets to 50% vaccination rate it leads to significantly improved economic performance
- US stocks close higher. S&P trades to another record close
- IMF says it still sees significant labor market slack in the US, will impact on wage and price pressure
- Crude oil settled at $75.23
- Sec. Raimondo: Unemployment benefits were always meant to be temporary
- Preview: US nonfarm payroll to be released tomorrow at 8:30 AM ET
- The CBO sees 2021 budget deficit of $3.003 trillion
- Fed Harker supports start a bond buying pullback later this year
- UAE, Kazakhstan and Iraq vehemently oppose gradual increase of 2M BPD
- ECB Weidman: Backs symmetric inflation goal at 2% over medium-term
- European major indices close the day higher
- ISM manufacturing PMI for June 60.6 versus 61.0 estimate
- US Markit manufacturing PMI for June 62.1 versus 62.6 preliminary
- WTI crude oil futures trade above $76 ahead of the OPEC+ meeting
- US initial jobless claims 364K vs 390K estimate
- The NZD is the strongest and the JPY is the weakest as NA traders enter fr the day
- Spot gold up $6.87 or 0.39% at $1776.90.
- Spot silver is down $0.10 or -0.41% $26.01
- WTI crude oil futures trading up $1.42 or 1.94% at $74.92
- Bitcoin is trading down $1595 or -4.55% at $33,441.29
The US stock market closed higher across the board with the S&P index leading the way today. It was also the six trading day in a row that the S&P has closed at a record high. The NASDAQ index lagged as interest rates moved higher.
In Europe, the major indices closed higher led by the Spain's Ibex, and UK FTSE 100 (each rose around 1.25%).
In the US debt market today, yields waffled up and down. With the 10 year note trading with a low yield of 1.438% and a high yield of 1.485%. It is trading near 1.4646% up 2.1 basis points.
In the forex, the USD is ending as the strongest of the majors ahead of the US jobs report on Friday. Higher yields also helped to push the greenback higher. The dollar rose most verse the GBP (+0.51%). It gained 0.42% and 0.41% verse the JPY and the AUD. The will back on again 0.06% against the EUR and 0.09% versus the CHF.
The weakest currency is the GBP.
The US jobs report will be released at 8:30 AM on Friday and is expected to show 700,000 new nonfarm payroll jobs in June which is up for 559,000 in May. The unemployment rate is expected to fall to 5.7% from 5.8% last month. Wages are expected to rise 0.4% versus 0.5% last month. For a full preview of the employment number click here.
As we head into the final day of the week, what are some key technical levels for some of the major currency pairs?:
- USDJPY: The USDJPY continued its run to the upside started yesterday and in the process extended above the 2021 high price of 111.11 today. The extension took the price up to 111.634. That was just short of the March 2020 high price at 111.709. Get above that level in the new trading day, would have traders looking toward the 2020 high price of 112.238. That is also the highest level going back to April 2019. On the downside in the new day, falling back below the June high at 111.11 and the end of March high at 110.96 would likely lead to more momentum selling to the downside on the failed break. Those levels will be key going into the employment data as well tomorrow.
- EURUSD: The EURUSD trade to its lowest level since April 6, 2021. The low price reached 1.18368 which was just short of an old swing low going back to March 9, 2021 at 1.18348. Later in the month of March, that low was broken on the way to the March 31 low price of 1.17035. The move to the low, and the rise back above the 1.18348 level took nine trading days (the price moved back above the old swing low on April 9). The price has not returned to that extreme since that time.
- GBPUSD: The GBPUSD moved to the lowest level since April 16th today. The price is down 5 of the last 6 days (the one up day was actually a day the pair close unchanged). The move lower moved below a swing area between 1.3786 and 1.37976 (going back to swing lows from June 8, June 21 and June 30) on two separate occasions today. The first break (in the early European session) saw the price move to a low of 1.3764, before rotating back to the upside and back above the aforementioned swing area. The second break in the New York session, saw the price move below and extend to 1.37517. Into the new trading day, as always the price can remain below 1.37976 (let's call it an even 1.3800), the sellers remain more in control. Staying below the 1.3800 level would have traders looking toward the March and April lows near 1.3668 as the next major target. Below that sits the rising 200 day moving average at 1.36386.
- USDCAD: The USDCAD traded above and below its 100 day moving average for the second consecutive day. That currently comes in at 1.2386. The pair moved below the moving average in the early North American session but could not extend below its 100 hour moving average on the downside. The price subsequently moved back above the moving average and continued higher, trading to the highest level since June 21. That move rose above the high price for yesterday at 1.2423. That level remains a close risk level for longs into the new trading day (we are currently trading at 1.2437). As long as the price can trade and remain above its 100 day moving average at 1.2386, the bias is more bullish. The topside targets with a look toward the high prices from June 18 and June 21 near 1.2479 and 1.24863. Get above each and the pair will be trading at the highest level since April 23 with the next target at 1.25464 and above that the falling 200 day moving average 1.26706. Move back below the 100 day moving average, and the bulls/buyers would be disappointed and target the rising 100 hour moving average and 200 hour moving average (currently at 1.2369 and 1.2345 respectively.
- AUDUSD: The AUDUSD traded to the lowest level going back to December 10 today (so new low for the trading year). The move to the downside today was able to stay mostly below its 50% midpoint of the range since the November 2020 low at 0.74983 (call it 0.7500). The current price is trading at 0.7476. If the sellers are to remain in firm control on the new 2021 break lower, stay below the 0.7500 level would be required. On the downside, the next target comes in at the 0.7400 area followed by 0.73784 (61.8% retracement of the move up from the same November low).