Global markets remain volatile ahead of the most awaited macro news of the week, the US non-farm payroll report. The US Bureau of Labor Statistics (BLS) will release the February jobs report today at 13.30 GMT. The market participants are anticipating 205,000 new nonfarm jobs in February following the 517K increase recorded in January, the unemployment rate is expected to stay at 3.4%.
As we are heading to the crucial hours of this week, we may experience significant volatility with an increased risk of market gaps so we recommend to everyone should have sufficient margin coverage and be comfortable with your exposure on your account.
US futures slightly regain upside momentum during the European session as investors took a breather following the previous session’s sell-off, but the upside momentum is limited ahead of the US jobs report. Dow Jones plunged below 32,000 as investors continued to bet on further Federal Reserve tightening to bring decades-high inflation under control.
Oil prices plunged to fresh monthly lows as investors remain concerned about the aggressive monetary tightening that could lead to a demand slowdown. From a technical perspective, both US WTI and brent prices are maintaining a negative bias according to the weekly chart. The volatility in the commodity market is expected to remain high in the coming weeks.
In the currency market, GBPUSD recovering lost ground. The currency pair rebounded back to above 1.1950 following the release of better-than-expected UK GDP data. Meanwhile, King Dollar struggling to regain upside momentum as traders across the globe wait for the result of the US employment to get a clear picture of the greenback's long-term direction.
The precious metal rebounded from the weekly lows after the USD gives back some of the gains. The metal inched a little higher Friday as the dollar index stays under pressure for the third consecutive day. However, later today could see increased volatility spikes after the release of the US employment report. At the time of writing, the metal trades were above $1835.
On the data front, the Bank of Japan left its ultra-easy monetary policy unchanged on Friday in its last meeting before Governor Haruhiko Kuroda steps down and is replaced by economics professor Kazuo Ueda.
Moving ahead today, the important events to watch:
US – Non-Farm payrolls: GMT – 13:30
Canada – Employment report: GMT – 15:00
Technical Outlook and Review
EURUSD: On the bullish side, the resistance stays above 1.0610, and a break above this exposes the index towards the 1.0640/50 level. On the flip side, rejection and pullback from the 1.0610 resistance allow for a dip towards 1.0550, with 1.0530 and 1.0500 forming additional downside targets.
The important levels to watch for today: Support- 1.0550 and 1.0500 Resistance- 1.0610 and 1.0640.
GOLD: For today, considering heavy volatility there are chances the metal can rally back to above the key resistance of $1840. On the downside, the decline is more extensive, and it will be hard to rule out a run towards $1800 if the metal breaks below again $1820.
The important levels to watch for today: Support- 1820 and 1800 Resistance- 1820 and 1826.
Quote of the day – “The art of investing is not about figuring out what has already happened. It’s about anticipating the future and creating the future that others will read about in The Wall Street Journal.” – Joshua Rogers.