End of the week Currency markets review


NFPs that were announced earlier today, disappointed the markets and reversed all the positive image that had been developed the last 2-3 days regarding the US jobs market. More specifically, the new job positions in May were 559K and missed the expectations of 650K. The problem is more intensive since there were developed hopes for much better results as the ADP Employment Change that was announced yesterday, was significantly better than the expectations. USD was also strengthened yesterday due to some markets’ expectations for tapering from the Fed, much earlier than the schedule. Today though, after the NFPs release, USD is bearish, approaching the price area of 90 again. President Biden also speaks at 14:00 GMT and the volatility may increase again. The next big thing for USD is the Inflation announcement next week because it may trigger the Monetary Policy.
EURUSD (current price 1.2170) had a bearish trend before NFPs to the price area of 1.21 but after the release, we saw a 70 pips jump. Markets ignored the positive PMIs announcements in many European countries and Eurozone. The dominating factor is the USD and how markets perceive the next movements of the Fed regarding the US Monetary Policy. Next week, with the US Inflation news, will be very critical for the pair’s trend and the USD weakness (which means a bullish trend for EURUSD) has now better chances.
GBPUSD (current price 1.4197) was also bearish yesterday, with the USD strength dominating on the pair but we saw a bullish recovery before the NFPs since the UK Markit Construction PMI was announced at the impressive 64.2. If GBPUSD can solidly surpass 1.42, the next short-term target is 1.4250 and above this, the resistance of 1.4350.
USDJPY (current price 109.60) lost the milestone price of 110 after the NFPs. The pair had a good uptrend, up to 110.33 due to the positive US announcements and due to the perception that Fed may tighten the Monetary Policy, earlier than expected. Japan did not have any important news to release so all the pair’s activity is based on USD. Below 109.30 a downtrend scenario is possible enough.
AUDUSD (current price 0.7733) showed some bullish recovery signs since yesterday but this trend was boosted after NFPs. Australian Imports/Exports, Trade Balance, and Retail Sales were not bad at all and even if most of the commodities (gold and copper mainly) were dropping, the pair had mild bullish tendencies. Is this a game-changer for the pair? Until the US Inflation release (next week) there are no safe estimations.


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