We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bullish
Gold
Mixed
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • RT @DanielGMoss: Broad risk-on tilt seen early in #APAC trade The haven-associated $USD and $JPY plunging The trade-sensitive $AUDUSD an…
  • Market snapshot: US equity futures pointing higher early into Asia trade
  • Trump Press Briefing: - We will be ready to distribute vaccine when its ready. We are seeing promising signs.
  • President Trump signs Hong Kong sanctions bill targeting banks and ends special status agreement. "Hong Kong will now be treated the same as mainland China" $USDHKD
  • Trump China Briefing: - We've been tough on the WTO - We withdrew from WHO. Maybe some day we will rejoin. - Make no mistake, we hold China fully accountable for virus and for unleashing it upon the world
  • Trump China Briefing: - We convinced many countries not to use Huawei - If they want to do business with us they can't use Huawei
  • Trump China Briefing: - Signed executive order to hold China accountable for repressive actions against people of Hong Kong - HK will now be treated the same as mainland China. No export of sensitive tech
  • On the back of a failed move lower, EUR/GBP has advanced and bulls are eyeing a retest of the June high. Get your $EURGBP market update from @RichardSnowFX here:https://t.co/M3xRD92zLC https://t.co/RP6XaFDMOv
  • USD/CAD continues to hold the month-old range, even as the US Dollar pushes down to a fresh low.Get your $USDCAD technical analysis from @JStanleyFX here: https://t.co/K5VuRiqKbt https://t.co/fjCoHrfTsq
  • 20 minutes and still waiting... https://t.co/HCRZTzsFfS
Oil, Copper Pare ECB-Induced Gains, Gold Weak into Non-farm Payrolls

Oil, Copper Pare ECB-Induced Gains, Gold Weak into Non-farm Payrolls

2015-09-04 06:13:00
Nathalie Huynh,
Share:

Talking Points:

  • Rally due to European Central Bank’s QE expansion quickly subsided before Non-farm Payrolls
  • Oil sensitive to macro, awaits employment data and subsequent USD moves
  • Copper bearish coming up to US data
  • Gold saw progressive outflows, expects volatility with USD swings

The European Central Bank monetary meeting yesterday eluded to increase the size, composition, and duration of its quantitative easing program. This led to an instantaneous rally in equities and commodities, although momentum quickly subsided and position-covering took over ahead of Non-farm Payrolls data and a long US weekend.

The Federal Reserve will factor this employment data into the timing of rate lift-off when they meet on September 16-17. A good number would affirm sustainable economic growth therefore support an early rate rise and boost the US dollar, leading to a drop in commodity prices.

Copper and aluminum pared the ECB-induced gains, after copper closed at the highest since August 10. The metal has lost the most among major commodities so far amid talks of profit taking before a US long weekend and China coming back from holidays next week. There is little fundamental upside prospect for copper at present as it is strongly attached to a slowing Chinese economy, hence prices may react more negatively to any US dollar rally than other commodities.

In recent days, oil has proven to be extremely sensitive to macro events. It joined equities to test the upside after ECB’s President Draghi struck a dovish tone yet quickly cooled down to sideways moves in Asia’s trade. This completely mirrored the crash-to-rebound on September 2 upon a multi-year low China manufacturing gauge.

Therefore oil prices will take cues from the market’s interpretation of Non-farm Payrolls today and swing in reverse to subsequent USD moves. A weekly oil rig count by Baker Hughes also contributes to volatility ahead.

Gold stayed flat during Asian session and interests had waned daily ahead of employment data, despite lowered expectations for an early US rate rise. Chances for a September increase had progressively reduced in the past three weeks since China devalued its currency and given recurring equity rout. Hence Non-farm Payrolls data is thought to drive the US dollar more than a shift in Fed’s decision; as such ensuing gold volatility may be lesser than previously expected.

GOLD TECHNICAL ANALYSIS – Gold dropped below 38.2% Fibo and currently lingers on the lower end of yesterday price band with low volatility. Momentum signals clearly indicate further declines with a firm support level at 23.6% Fibo at 1109.3. Chances for gold prices to climb back above 1132 are slim except for a severe rally. The gold bears may place short-term trades ahead.

Oil, Copper Pare ECB-Induced Gains, Gold Weak into Non-farm Payrolls

Daily Chart - Created Using FXCM Marketscope

COPPER TECHNICAL ANALYSIS – Copper is stuck in a lackluster period with unclear momentum signals. Support level is found at 2.2080 whereas yesterday’s high at 2.4170 offers a resistance level. Range traders may take advantage of this region in the absence of directional moves.

Oil, Copper Pare ECB-Induced Gains, Gold Weak into Non-farm Payrolls

Daily Chart - Created Using FXCM Marketscope

CRUDE OIL TECHNICAL ANALYSIS WTI oil is capped at a recent peak of 49.30 before US data offer more clues on Fed’s rate assessment and consequently move the USD. As highlighted in past reports, momentum signals hinted at downward pressure on oil prices and if the dollar rally oil may see a drastic descent from current support level at 5-day moving average to touch the 20-day moving average at 42.86 below it.

Oil, Copper Pare ECB-Induced Gains, Gold Weak into Non-farm Payrolls

Daily Chart - Created Using FXCM Marketscope

--- Written by Nathalie Huynh, Currency Strategist for DailyFX.com

Contact and follow Nathalie on Twitter: @nathuynh

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.