Mixed US jobs data generates volatility in the greenback
The US dollar was extremely volatile on the foreign exchange market this week as the United States economy released mixed jobs data. The US dollar initially received a boost as the API private sector employment report came in above consensus forecasts, and weekly jobless claims in the United States dropped to levels not seen since March of last year. However, the US dollar dropped in value against a basket of top currencies after the Non-farm payrolls jobs report missed markets expectations. This was the second month in a row that the Non-farm payrolls report came in weaker than analysts had been predicting, although the official US unemployment rate fell to 5.8 percent.
- USDJPY is only bullish while trading above the 109.80 level, key resistance is found at the 110.40 and 110.90 levels.
- USDJPY is only bearish while trading below the 109.80 level, key support is located at the 109.00 and 108.40 levels.
Bitcoin continued to build on its recent recovery from $30,000 support level this week as the number one cryptocurrency showed signs of a market bottom. Fundamental news surrounding the top coin was limited this week, although on-chain data Bitcoin and Ethereum transaction costs falling to a six-month low. Although a bearish Tweet from Tesla CEO Elon Musk managed to send Bitcoin sharply lower from the $39,000 level. Bitcoin has been known to rally when transaction costs are low, as holders can seen large and small payments with minimal costs. Other on-chain data showed whales returning to Bitcoin in increasingly numbers, while daily active address activity remained muted after over 800,000 accounts were liquidated last month.
- The BTCUSD pair is only bearish while trading below the $40,000 level, key support is found at the $35,000 and $30,000 levels.
- The BTCUSD pair only bullish while trading above the $40,000 level, buyers may test towards the $43,000 and $48,000 resistance levels.
The German economy posted more strong economic data this week causing the German DAX index, often referred to as the GER30, to rally to a new all-time trading high. German CPI inflation data came in MUCHstronger than expected on a monthly and annual basis, prompting traders to question whether the ECB may need to adjust rates. The ECB has a mandate to keep CPI at around 2 percent, meaning that this weeks German inflation annual CPI print of 2.5 percent was above the central bank target. German Unemployment data also came in strong this week, with the official monthly Unemployment number coming in at -15,000.
- The EURUSD pair is only bearish while trading below the 1.2160 level, key support is found at the 1.2100 and 1.2060 levels.
- The EURUSD pair is only bullish while trading above the 1.2160 level, buyers may test towards the 1.2200 and 1.2260 resistance levels.
The Australian dollar was mixed against the US dollar this week after the Reserve Bank of Australia keep interest rates unchanged at 0.10 percent, and also kept the recent bond buying scheme firmly in place. The Reserve Bank of Australia monetary policy statement was largely a copy of the previous months address to market participants. The RBA did note that the ongoing recovery in the Australian economy was strong that they expected the domestic economy to grow at a pace of 4.75 percent this year, and 3.50 percent during the course of 2022.
- The AUDUSD pair is only bearish while trading below the 0.7700 level, key support is found at the 0.7600 and 0.7550 levels.
- If the AUDUSD pair trades above the 0.7700 level, buyers may test towards the 0.7750 and 0.7800 resistance levels.