Weak US jobs data shocks financial market
The United States monthly jobs report showed that the United States economy created 266,000 jobs during the month of April, marking a big miss from what financial markets had been expecting. The official United States unemployment rate also rose to 6.1 percent in April, which was 0.3 percent increase from last month. Worryingly, last months blockbuster 916,000 jobs number was also revised lower to just 770,000. The market reaction and US dollar falling broadly on the foreign exchange and the price of gold rising. Stocks also advanced on hopes that the weak number would mean that Federal Reserve would continue with low rates and QE.
- USDJPY pair is only bullish while trading above the 108.45 level, key resistance is found at the 109.30 and 110.00 levels.
- USDJPY is only bearish while trading below the 108.45 level, key support is located at the 108.00 and 107.50 levels.
Bitcoin enjoyed another strong trading week on the fundamental front, as eBay announced that it was considering the top digital assessment for its platform. Executives from cryptocurrency custody firm NYDIG also stated this week that cryptocurrencies were coming to a large number of United States banks. Bitcoin enjoyed strong dip-buying demand after around the $53,000 level after briefly dropping on comments from US Treasury Secretary Janet Yellen surrounding the need to raise interest rates. Bitcoin’s market dominance in percentage terms also slipped to a fresh multi-year low this week as Ethereum and Dogecoin continued to rally.
- The BTCUSD pair is only bearish while trading below the $55,800 level, key support is found at the $53,000 and $47,000 levels.
- The BTCUSD pair only bullish while trading above the $55,800 level, buyers may test towards the $60,000 and $65,000 resistance levels.
The British pound had a mixed week on the foreign exchange market after the Bank of England announced that they would keep the total stock of QE purchases unchanged, but they would slow down the monthly pace of purchases. The Bank of England also kept interest rates unchanged at 0.10 percent as widely expected by most economists. The Bank of England also turned up the hawkish rhetoric and noted that inflation risks to the United Kingdom economy remain broadly balanced. Sterling remained in a cautious mood for much of the trading week as the United Kingdom was holding a series of Local Elections, which the Conservative party easily won.
- The GBPUSD pair is only bearish while trading below the 1.3800 level, key support is found at the 1.3770 and 1.3710 levels.
- The GBPUSD pair is only bullish while trading above the 1.3800 level, buyers may test towards the 1.4000 and 1.4110 resistance levels.
The commodity sector enjoyed another stellar weak as the ISM manufacturing report continued to show a build up inflationary pressure in the United States. Crude and Brent oil benefitted as traders and investors factored in a coming super cycle in commodities due to increasing inflationary pressure. Raw commodities such as lumber and wheat also surged this week as companies continued to rise prices on the consumer. Gold broke past the $1,800 level with relative ease, while the price Silver also enjoyed a strong week and largely built on April’s price recovery.
- The USDCAD pair is only bearish while trading below the 1.2470 level, key support is found at the 1.2200 and 1.2000 levels.
- If the USDCAD pair trades above the 1.2470 level, buyers may test towards the 1.2520 and 1.2600 resistance levels.