The highlight of the week was the disappointing US nonfarm payrolls report and downbeat inflation figures across the Eurozone.
The greenback weakened against its major counterparts, after nonfarm payrolls data indicated that the US economy created fewer-than-expected jobs in May, suggesting that the nation’s labor market was losing momentum. However, the nation’s unemployment rate dipped to its lowest level since May 2001 in May and the average hourly earnings grew as expected in the same month, making it more likely for the Federal Reserve (Fed) to raise interest rates later this month. Moreover, ADP’s private sector added jobs at a robust pace in May. Additionally, the nation’s ISM manufacturing PMI surprised with an unexpected rise in May, painting a bright picture of the nation’s manufacturing sector. Moreover, the nation’s personal spending grew at its quickest pace in 4 months in April, while personal income rose as expected in the same month, boosting expectations that the world’s largest economy is poised to rebound after a lackluster growth in the first quarter.
Another set of data indicated that the number of Americans filing for fresh unemployment benefits advanced more-than-anticipated in the week ended 27 May 2017. Further, the nation’s construction spending posted its biggest drop in a year in April, while pending home sales unexpectedly dropped for a second straight month in the same month. Also, confidence among Americans unexpectedly fell to a 3-month low level in May. Separately, the Fed’s latest Beige Book report indicated that the US economy grew at a modest to moderate pace from early April through late May. However, it also noted that a number of firms have become somewhat less optimistic about the future.
The Euro ended the week higher against the USD. Data showed that the flash consumer price index in the Eurozone advanced at its weakest pace in 5 months in May, easing pressure on the ECB to curtail its monetary stimulus program. Nevertheless, the region’s unemployment rate unexpectedly fell to an 8-year low level of 9.3% in April.
Elsewhere, Germany’s annual inflation growth slowed to a 6-month low level in May. Further, the nation’s retail sales disappointed with an unexpected fall in April, dampening hopes that consumer spending will play a leading role in driving growth in Eurozone’s biggest economy this year. On the other hand, the nation’s unemployment rate declined to a record low level in May.
EURUSD
The EUR traded 0.86% higher against the USD last week, with the pair closing at 1.1279. On the economic front, the flash consumer price index (CPI) in the Eurozone advanced less-than-expected in May. On the contrary, the region’s unemployment rate unexpectedly fell in April. Additionally, the region’s final Markit manufacturing PMI advanced in May, confirming the preliminary print. Separately, Germany’s seasonally adjusted unemployment rate dropped to a record low level in May, while the nation’s preliminary CPI climbed less-than-expected on an annual basis in the same month. On the other hand, the nation’s retail sales registered an unexpected fall in April. Other data indicated that the nation’s manufacturing sector growth was revised higher in May. During the previous week, the pair traded at a high of 1.1285 and a low of 1.1110. The pair is expected to witness its first support at 1.1164 and second support at 1.1050, while the first resistance is expected at 1.1339 and second resistance at 1.1400. This week, traders would focus on the European Central Bank’s interest rate decision along with the Eurozone’s final GDP figures, final services PMI, Sentix investor confidence and retail sales data. Additionally, Germany’s industrial production and trade balance data would also be keenly watched by investors.
GBPUSD
The GBP traded 0.66% higher against the USD last week, with the pair closing at 1.2888, after the latest data indicated that UK’s manufacturing sector is sustaining most of the growth momentum. Britain’s Markit manufacturing PMI fell less-than-expected in May. Meanwhile, the nation’s seasonally adjusted Nationwide house prices surprisingly eased in May. Also, the number of mortgage approvals for house purchases in the nation unexpectedly eased in April. In other economic news, the nation’s GfK consumer confidence index unexpectedly improved in May, while the nation’s net consumer credit advanced in April, meeting market expectations. Moreover, the nation’s Markit construction PMI surprisingly advanced in May. The GBP hit a high of 1.2921 and a low of 1.2769 against the USD in the previous week. Immediate downside, the first support level is seen at 1.2798, followed by 1.2707, while on the upside, the first resistance level situated in 1.2950, followed by 1.3011. Looking ahead, market participants will anxiously await Britain’s Markit services PMI, industrial as well as manufacturing production, trade balance and NIESR GDP estimate data, all set to release this week.
USDJPY
Last week, the USD traded 0.84% lower against the JPY and closed at 110.40. On the macro front, Japan’s jobless rate remained unchanged at 2.8% in April, meeting market expectations. Moreover, the nation’s seasonally adjusted retail trade advanced more-than-expected by in April and the nation’s large retailers’ sales rebounded in the same month. Further, the nation’s flash industrial production rebounded in April, while the nation’s small business confidence index climbed in May. Also, the nation’s final Nikkei manufacturing PMI was revised upwards in May. The pair traded at a high of 111.71 and a low of 110.33 during the previous week. The pair is expected to find support at 109.92, and a fall through could take it to the next support level of 109.43. The pair is expected to find its first resistance at 111.30, and a rise through could take it to the next resistance level of 112.19. Looking ahead, Japan’s final GDP, Nikkei services PMI, trade balance, tertiary industry index and Eco-Watchers survey data, all slated to release this week, will be on investors’ radar.
USDCHF
The USD traded 1.13% lower against the CHF last week, with the pair closing at 0.9631. Macroeconomic data showed that Switzerland’s seasonally adjusted gross domestic product (GDP) climbed less-than-expected by 0.3% on a quarterly basis in 1Q 2017. Also, the nation’s ZEW economic expectations index registered a rise in May. Further, the nation’s UBS consumption indicator rose in April. On the contrary, the nation’s real retail sales dropped on an annual basis in April. Moreover, the nation’s SVME–PMI surprisingly fell in May. The USD hit a high of 0.9808 and a low of 0.9623 against the CHF in the previous week. The pair is expected to witness its first support at 0.9567 and second support at 0.9502, while the first resistance is expected at 0.9752 and second resistance at 0.9872. Going ahead, investors will closely monitor Switzerland’s unemployment rate and consumer price inflation data, both slated to release this week.
USDCAD
The USD traded 0.3% higher against the CAD last week, with the pair closing at 1.3487. On the data front, Canada GDP expanded more-than-estimated by 0.5% on a monthly basis in March. Meanwhile, on a quarterly basis, the nation’s annualized GDP rose less-than-expected by 3.7% in the first quarter of 2017. On the contrary, the nation’s Markit manufacturing PMI declined in May. The pair traded at a high of 1.3547 and a low of 1.3428 during the previous week. The pair is expected to find support at 1.3428, and a fall through could take it to the next support level of 1.3368. The pair is expected to find its first resistance at 1.3547, and a rise through could take it to the next resistance level of 1.3606. Moving ahead, investors will look forward to Canada’s unemployment rate, housing starts and building permits data, all scheduled to release this week.
AUDUSD
The AUD weakened against the USD last week, closing 0.07% lower at 0.7443. Last week, data revealed that Australia’s seasonally adjusted building approvals rebounded in April, while the nation’s seasonally adjusted retail sales climbed in April. Moreover, the nation’s HIA new home sales rebounded in April and private sector credit climbed in April, at par with market expectations. In contrast, the nation’s AiG performance of manufacturing index declined in May. The AUD hit a high of 0.7476 and a low of 0.7373 against the USD in the previous week. The pair is expected to witness its first support at 0.7385 and second support at 0.7328, while the first resistance is expected at 0.7488 and second resistance at 0.7534. Ahead in the week, market participants will keep a close watch on the Reserve Bank of Australia’s (RBA) interest rate decision along with Australia’s 1Q GDP data.
Gold
During the previous week, gold traded 0.98% higher and ended at USD1279.17 per ounce, amid weakness in the greenback. The yellow metal hit a high of USD1282.20 per ounce and a low of USD1261.30 per ounce in the previous week. Gold is expected to its find support at USD1267.80 per ounce, and a fall through could take it to the next support level of USD1254.10 per ounce. The yellow metal is expected to find its first resistance at USD1288.70 per ounce, and a rise through could take it to the next resistance level of USD1295.90 per ounce.
Crude Oil
Crude oil traded 4.3% lower in the previous week, closing at USD47.66 per barrel, amid concerns that US President, Donald Trump’s decision to pull out from the Paris climate change deal could spark more crude oil drilling in the US. However, weakness in oil prices were capped, after the Energy Information Administration (EIA) reported that US crude oil stockpiles dropped by 6.4 million barrels to 509.9 million barrels in the week ended 26 May, while the American Petroleum Institute (API) report showed that US crude oil inventories fell by 8.7 million barrels to 513.2 million barrels in the same week. Crude oil witnessed a high of USD50.28 per barrel and a low of USD46.74 per barrel last week. Crude oil is expected to its find support at USD46.23 per barrel, and a fall through could take it to the next support level of USD44.71 per barrel. The yellow metal is expected to find its first resistance at USD49.77 per barrel, and a rise through could take it to the next resistance level of USD51.79 per barrel.
Good trades meus amigos. ↑↑
