- A weaker-than-expected headline NFP with slightly increased unemployment rate gave downward pressures to the buck last Friday. However, it was the report that ECB would hold off tapering its QE program by the end of the year cushioned the greenback’s fall for now.
- The gold had a gap up opening in early Monday morning to another new high for the year at 1336.6.
- S. equities and ETF will be closed today for Labor Day while some of the commodities futures exchanges will change their trading hours as well.
The United States Dollar traded in a modestly choppy session last Friday (1 September) due to a weaker-than-expected. The headline NFP came in at 156,000 increase of jobs, lower than the previous reading and consensus forecast. The Bureau of Labor Statistics also said the unemployment rate rose to 4.4% from 4.3% for August and average hourly wages unchanged at 2.5%, remained subdued for several months in a row. The dollar dived in response before surprisingly turning up immediately when the news about ECB would hold off tapering its QE by the end of the year hit wires soon after the NFP data released. It would be prudent to wait and see as we would see choppy trading ahead of Labor Day holidays.
The dollar index consolidated after reacting off H4-period EMA144 and short-term price action of the dollar could fluctuate around H4-period long term moving averages at this juncture, with immediate supports at 92.4 and 92.9, upside resistances at H4-period EMA144 and its highs from last week.
（DXY H4 chart）
As to non-U.S. currencies, the euro reacted off highs due to rumors. Its daily technical supports remain intact, however, its MACD indicator showed bearish divergence while the price actions of the single currency were directionless in the 4 hour chart. Therefore, whether or not the euro bulls will resurface would be interesting to observe. The pound broke above its weekly highs on the back of NFP data before fell back slightly in late session. With downside supports at H4-period EMA30 and EMA144, the currency pair could potentially test upside target at 1.30 handle this week. The Aussie dollar reacted off highs last Friday and extended declines early this morning when the commodity currency gapped lower in opening hours. However, it managed to rally again within its daily uptrend. Nonetheless it still worth to note that the overall rises in the pair is significantly slower than that of the month of July. The pair is expected to either rise rapidly to test prior swing highs or decline sharply to test daily trend supports.
（AUD/USD Daily chart）
Now let us take a look at precious metals. The gold reacted off highs on the back of NFP released last Friday before reversed up again in late session. The yellow metal gapped higher early this morning to a high of 1336.6. A short term corrective decline may occur as the price distanced itself from its long term moving averages on the 1 hour chart, potentially filled the gap on the day, with short term downside supports at 1328 follow by H1-period EMA30. Whether or not its short term moving averages could turn convergent and stay well above its long term moving averages will be important to observe.
（Gold H1 chart）
By JasonZou —— Chief Analyst of AvaTrade China
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.