It was a news-packed week filled with volatility, and what better way to end the week than with the release of the US Non-Farm Payrolls report. The US Labor Department reported that the nation added 175,000 jobs in May, better than the median forecast of just 167,000. However, unemployment rate ticked back up to 7.6 percent, after printing 7.5 percent in April.
In other news, there were several central banks that declared their rates this week, and all of them left their respective rates unchanged. Reserve Bank of Australia left its rate unchanged at 2.75 percent; both the Bank of England and European Central Bank left their rates at 0.50 percent.
In Australia, the Trade Balance swung back to surplus after a little over 1.5 years of continued deficits. Australian Bureau of Statistics reported Thursday that Trade Balance stood at AUD0.03 billion in April. The last time Australia enjoyed a trade surplus was back in December 2011 (AUD1.33 billion).
Canada, whose economy is just one-tenth that of the US, added 95,000 jobs last May. Unemployment rate stood at 7.1 percent.
Gold lost its luster this week as it only traded in a $46 range. The $1,400 level remained influential, and bears continued to dominate, even as price gained above $1,400 on Thursday. $1,400 remains line in the sand, and price should make a strong move away from this level on either side to break out of the current consolidation.
Compared to gold, Oil did much better in this week’s trading. Oil traded $5 higher and even engulfed last week’s candle as price closed the week above the $96 level. Multiple zones of resistance lie ahead and it would be fascinating to see how bulls would fare in the coming weeks. Meanwhile, the downside looks well-supported around $91-$92.
After many weeks of trading in confined ranges, EURUSD swung back into volatility as a consequence of extreme JPY moves this week. The pair rose 350 pips this week and reached the coveted 1.3300 level, as the 1.2950 area remained supportive to bulls last Monday. Although the move did not last, the break of 1.3300 for the first time in many weeks could be a sign of a bullish prospect going forward. However, bulls still need to force their way to potential resistance zone around 1.3300-1.3500.
JPY took home to bacon in terms of being the most volatile this week. USDJPY dived 570 pips after the JPY bears bailed out of their positions as the 100 level failed to hold. 95 should hold in the next few weeks; otherwise, more bulls will be in danger as there would be risk of price moving toward 91-92.50.
GBPUSD has drastically changed its fortune this week. The 1.5000 level came very close to getting pulverized in the prior weeks but bullish support came to the rescue in the nick of time. Then the JPY volatility this week has provided strong wind behind GBP’s sails, bringing GBPUSD nearly 500 pips higher this week. Buyers reached a 1.5683 weekly high on Thursday, close to the 1.5700 level which also houses the 200-day MA. 1.5400 should hold during the coming week if the bullish momentum were to remain intact.
The Week Ahead
On Monday, Japan’s Current Account, Bank Lending, Final GDP; France’s Industrial Production; Switzerland’s Unemployment Rate and Retail Sales; Canada’s Housing Starts; US FOMC Bullard’s speech. Today, some states in Australia will observe the Queen’s Birthday, while China will observe the Dragon Boat Festival.
On Tuesday, there are Japan’s BSI Manufacturing Index, M2 Money Stock, BOJ Press Conference and Monetary Policy Statement; Australia’s NAB Business Confidence and Home Loans; New Zealand’s REINZ HPI; Day 1 of Germany’s Constitutional Court Ruling concerning ECB’s OMT policy; UK’s NIESR GDP Estimate; US Wholesale Inventories.
Wednesday starts early with Japan’s Core Machinery Orders and BOJ Monthly Report; Australia’s Westpac Consumer Sentiment; Day 2 of Germany’s Constitutional Court Ruling concerning ECB’s OMT policy; UK Unemployment Rate, Claimant Count Change, and MPC Member Fisher’s speech; Eurozone Industrial Production; US Federal Budget Balance.
Thursday is the most news-packed day this week with the release of Reserve Bank of New Zealand’s Rate Announcement, Statement, and Press Conference; Australia’s Employment Data and MI Inflation Expectations; Switzerland’s PPI; ECB Monthly Bulletin; Canada’s NHPI; US Retail Sales, Import Prices, Unemployment Claims, and Business Inventories.
Friday ends the week with the release of Business NZ Manufacturing Index; BOJ’s Monetary Policy Meeting Minutes; Eurozone CPI; Canada’s Manufacturing Sales; US Current Account, PPI, Capacity Utilization Rate, Industrial Production, and Preliminary UoM Consumer Sentiment.