Several largest American companies will publish their financial results this week. BTCUSD and XAUUSD are skyrocketing. What's going on in the markets?
NFP Is in Focus Today
Hello, guys! Friday is here, and Nonfarm Payrolls is almost here, too. Let’s look at the most important events in the market.
According to ECB meeting minutes: ECB members agree with an assessment that points to a possible unexpected slowdown in economic activity in the Eurozone; more rate hikes will be needed if inflation does not ease; a rate hike in September would be necessary unless there is convincing evidence that the effect of the aggregate tightening of the monetary policy was strong enough to reduce inflation in line with the plan to bring inflation to the target of 2%
Meanwhile, Bank of America Corp. and JPMorgan Chase & Co. expect the single currency to fall to $1.05, a level last seen during the banking crisis in March. BNP Paribas Asset Management looks even lower: the price, in their opinion, can reach $1.02.
The price bounced back from 1.09100 and returned back to the support line at 1.08350. The local trend is still bullish: the pair may rise on the NFP release, but in the weekly timeframe the situation is not so optimistic - 200MA is heading down as well as the linear regression channel. If bears succeed in breaking 1.07650 - the pair will move to 1.06000. BofA and JP forecasts don't look so unreachable.
Oil Market and Canadian Economy
According to Bloomberg, Saudi Arabia is expected to extend oil production cuts until October. Meanwhile, Forbes announced that Russia will cut oil exports by 300,000 bpd to June in September. OPEC+ countries are fighting for the high oil price. Yesterday, XBRUSD increased by 1.75%. The price has almost reached its local highest high level at $87.70.
Canadian GDP is published today at 3-30 PM GMT+3. Experts think that in the second quarter, the economy grew by 0.3% vs. 0.8% a quarter earlier. The Canadian trade balance deficit started increasing; the unemployment rate jumped to 5.4% from 5.0% - fewer people had money to spend, leading to the Ivey PMI moving lower than the crucial 50 points. The economy is slowing down. That’s why the forecast makes sense.
Nonfarm Payrolls Release
Initial jobless claims in the US were released better than expected – 228K vs. 235K in the forecast. The 4-week average indicator grew and reached 237.50 K. Continuing jobless claims are rising. According to Challenger, Gray&Christmas the number of job cuts jumped. We think the US labor market has started slowing and expect the unemployment rate to be higher than 3.5%. The US dollar may fall.
XAUUSD started moving in flat. The market participants are waiting for the NFP release. If the dollar falls, XAUSD will jump up. The nearest resistance is approximately $1950.
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