General

The US Federal Reserve has decided on Wednesday to keep rates on hold as expected. Spotlight was then focused on US jobs numbers which came out weaker than expected. The Bureau of Labor Statistics reported that Non-Farm Employment Change grew less than expected in July, 209,000 versus 231,000 forecast. The actual number was lower than the 218,000 ADP Non-Farm Employment Change published on Wednesday. The surprise came from the Unemployment Rate number, which worsened to 6.2 percent, following three consecutive months of better-than-actual readings.

In other US news, Pending Home Sales dipped 1.1 percent in June, following a 6 percent advance in the prior month. The July CB Consumer Confidence index improved further to 90.9 in July, the highest reading since January of 2008. Chicago PMI fell 10 points to 52.6 in July.

In other news, Australia’s Building Approvals for June dropped 5 percent, following the 10.3 percent increase in May. Meanwhile, PPI surprised with a 0.1 percent dip in June.

Commodities

Gold formed its third consecutive bearish weekly candle after sellers managed to push the price down through the $1,300 level. If this level holds in the coming weeks, expect a move toward $1,250 or even lower.

After last week’s inside bar, Oil dropped like a waterfall as sellers piled in through stops below $100. Price declined just a little over $5 to reach the lower $97s, prices unseen since early-February of this year. A thick zone of resistance may have now formed above $100, so bears may have an easier time pounding oil in the next few days or weeks. If bearish momentum will persist, downside target will be $90-$91.

Currency Pairs

EURUSD hit its third bearish weekly close this week (nearly hitting the mentioned area at 1.3300-50), although Friday’s price action eradicated most of the week’s decline. The move is not surprising considering this pair has been relentlessly on-sided since the start of July. Bulls have an opportunity to recover, but the acid test just right at 1.3500. This level is followed by thick resistance in 1.3600-1.3700.

Bearish sentiment has been more pronounced in GBPUSD than EURUSD, as we have witnessed nearly 100 pips of decline in Sterling this week. Sellers are looking to target 1.6700, but bulls may have a chance to thwart that if the Dollar will decline in the coming week.

USDJPY finally posted two bearish days to contrast from the 9 consecutive bullish days behind it. Sellers came in at the 103 level however the decline has been relatively weak, as price managed to close the week not far behind at 102.60. This could indicate more bullish moves will come in the next few days.

The Week Ahead

Monday will have a spattering of news throughout the day, starting with Australia’s Retail Sales and ANZ Job Ads; Spain’s Unemployment Change; Switzerland’s SVME PMI; and UK’s Construction PMI. Australian banks will be closed to observe Bank Holiday, while Canadian banks observe Civic Day.

Tuesday will have improved news activity with Australia’s Trade Balance and RBA’s Rate Announcement and Statement; UK Halifax HPI and Services PMI; Spain and Italy Services PMI; Eurozone Retail Sales; US Factory Orders and ISM Non-Manufacturing PMI.

Wednesday will have a moderate news activity but will start early with New Zealand’s jobs data; Germany’s Factory Orders; Switzerland’s CPI; UK Manufacturing Production and Industrial Production; Italy’s Prelim GDP; US and Canada Trade Balance;

After Thursday’s jobs data from Australia, the market will focus on Europe with the release of ECB and BOE rate announcements and statements. These will be followed by Canada’s Building Permits and Ivey PMI; and US Jobless Claims.

Friday will still be lively in the news front with Japan’s Current Account and BOJ Monetary Policy Statement and BOJ presscon; Australia’s Home Loans and RBA Monetary Policy Statement; China’s Trade Balance; Germany and UK Trade Balance; France’s Industrial Production; Canada jobs data; and US Prelim Nonfarm Productivity and Prelim Unit Labor Costs.

The Bank of Canada has decided to keep its overnight rate unchanged at 1 percent. Accordingly, the deposit rate is set at 0.75 percent while the bank rate is at 1.25 percent. The Bank has noted that CPI and core CPI have moved up in recent months, and they attributed it to temporary effects rather than domestic factors. Inflation is projected to stay near 2 percent in the following two years.

Meanwhile, the US published a mixed bag of data this week. Both July readings of the Empire State Manufacturing Index and Philly Fed Manufacturing Index surged (25.6 and 23.9, respectively), but Housing Starts and Building Permits came in lower than expected (0.89 million and 0.96 million, respectively). Jobless Claims for the prior week came in lower than expected for a second week in a row at just 302,000. On the other hand, TIC Long-Term Purchases increased in May to a lower-than-expected $19.4 billion, following a revised lower reading for April (-$41.2 billion).

In other news, UK Claimant Count Change came in much better than expected in June (-36,300 versus -27.100 expected). Meanwhile, the May Jobless rate, as expected, registered a slight dip to 6.5 percent from 6.6 percent.

Commodities

We finally saw good resistance in Gold as price posted its first weekly loss in seven weeks. Although price declined, bulls were able to hold on to the $1,300 level, and this could indicate that they are still in control. They need another push toward $1,400 to avoid a move back close to $1,250.

Oil moved opposite of Gold, as the former made a substantial reversal this week off of the critical $99-$100 area. From peeking transiently below $99, price zoomed up close to $104, before closing the week below $103. This move has essentially negated the risk for further declines, but bulls should stay focused so as not to waste the current opportunity to bring price back above $105.

Currency Pairs

The risk of EURUSD visiting 1.3500 has been materialized this week as bulls failed to take out resistance around 1.3650. Current price action opens up to a move toward 1.3300-50 in the next two weeks. What can turn this around is a strong weekly close above 1.3550-1.3600 at the very least.

GBPUSD buyers attempted to create a bullish weekly close, but selling overwhelmed their efforts as the week drew to a close. The 1.7100 continues to attract a tug-of-war for the control of the remaining part of July. Bulls should gun for another run toward 1.7200, unless they want an increased pressure on 1.7000.

USDJPY traded this week with just a 70-pip trading range; however sellers have stayed dominant throughout the process. We could be seeing a setup for a large move down, unless buyers have a different idea in mind. Bulls should not waste time; they must gain a foothold above 103 as soon as possible.

The Week Ahead

Monday will mostly be quiet except for the release of Germany’s Bundesbank Monthly Report. Japanese banks will observe Marine Day.

Activity will pick up slightly on Tuesday starting with RBA Governor Stevens’ speech. This will be followed by Switzerland’s Trade Balance; UK Public Sector Net Borrowing and CBI Industrial Order Expectations; US CPI and Existing Home Sales.

Wednesday’s news activity will be a notch higher with Australia’s CPI; UK MPC Asset Purchase and Official Bank Rate votes, BBA Mortgage Approvals, and CBI Realized Sales; Canada’s Retail Sales; and Eurozone Consumer Confidence.

Thursday will register the most news activity starting very early with New Zealand’s RBNZ Rate Announcement and Statement, and Trade Balance; Japan’s Trade Balance; China’s HSBC Flash Manufacturing PMI; France, Germany, and Eurozone Flash Manufacturing and Services PMI; UK Retail Sales; US Flash Manufacturing PMI and New Home Sales.

Friday ends the week with Japan’s Tokyo Core CPI; New Zealand’s ANZ Business Confidence; Germany’s GfK Consumer Climate and Ifo Business Climate; Eurozone Private Loans and M3 Money Supply; UK Prelim GDP; and US Durable Goods Orders.

The focal point this week was on the employment outlook in several parts of the world. In Australia, the Bureau of Statistics reported employers hired 15,900 more people in June, compared a 5,100 decline in May. The Jobless Rate ticked higher from 5.9 percent to 6 percent.

Meanwhile, Canada saw a dimmer jobs outlook as Statistics Canada reported a surprise 9,400 decline in Employment Change. Analysts were expecting another month of increased hiring (median forecast 20,700). The Unemployment Rate also ticked higher in June to 7.1 percent.

In other news, Canada’s Building Permits got a surprise surge in May, attributed to shopping malls and multi-dwellings in Vancouver and Toronto. Permits surged 13.8 percent, the strongest seen since late-2013. The June Housing Starts came in slightly better than expected, while Ivey PMI sank further below 50 to 46.9, the worst reading since December.

Commodities

Gold bulls were able to maintain control of price this week, etching the sixth straight weekly bullish close well above the $1,300 level. We could be seeing a hardened support just above $1,300 for a potential move back toward $1,400. This is important in order to prevent another breakdown toward $1,250.

Meanwhile, Oil has made big moves in the past few weeks, sliding about $7 in three successive bearish weeks. Bulls will now have to contend with further selling pressure as price breaks apart the $100 barrier. Since the move toward $100 has come much earlier than expected, we can now expect the risk of a move back down to the $90-$95 area.

Currency Pairs

EURUSD trading activity has eased this week despite the marginal bullish weekly close above 1.3600. This move is more favorable to bears than bulls, hence bulls should keep pushing price up. A break of 1.3700 is important to reduce the bearish tone. The more price stays unchanged, the higher the risk of this pair visiting 1.3500.

GBPUSD traded in the upper part of the prior week’s 170-pip range, giving back some gains after comfortable five-week winning streak. Although the retreat was minimal, bears could still unleash a barrage of selling pressure in the coming weeks, so buyers must prepared to defend the 1.7100 level.

The significant gathering of USDJPY sellers this week enabled this pair to fulfill another bearish week – this time price closed at its lowest since mid-November of 2013. Could this be the beginning of the end? Last possible bulwark could sit around the 100-101 area. Beyond that, we could see a quick trip toward 95-98. All this selling pressure won’t dissipate unless bulls take out the 103 level.

The Week Ahead

Monday is mostly quiet except for the release of Japan’s Revised Industrial Production; China’s New Loans; and Eurozone’s Industrial Production and ECB Draghi’s speech.

Activity will pick up significantly on Tuesday with UK BRC Retail Sales Monitor; Australia’s New Motor Vehicle Sales and RBA’s Monetary Policy Meeting Minutes; BOJ’s Monetary Policy Statement and presscon; Switzerland’s CPI; UK PPI Input, PPI and RPI; Germany and Eurozone ZEW Economic Sentiment; US Retail Sales, Empire State Manufacturing Index,, Business Inventories, Import Prices, and Fed Yellen’s testimony before the US Senate Banking Committee.

A very busy Wednesday will start early with New Zealand’s CPI; China’s Fixed Asset Investment, GDP, Industrial Production, and NBS presscon; UK Claimant Count Change, Average Earnings Index, and Unemployment Rate; Canada’s Manufacturing Sales, BOC Rate Announcement and Statement, presscon, and Monetary Policy Report; US PPI, Capacity Utilization Rate, Industrial Production, TIC Long-Term Purchases, and Beige Book.

Thursday will start with Australia’s CB Leading Index and NAB Quarterly Business Confidence; Eurozone CPI; Canada Foreign Securities Purchases; US Unemployment Claims, Housing Starts, Building Permits, and Philly Fed Manufacturing Index

Friday ends the week with BOJ’s Monetary Policy Meeting Minutes; Canada CPI and Wholesale Sales; and US preliminary UoM Consumer Sentiment.

The Bank of Canada and Bank of England both decided in line with expectations this week, keeping the rate at 1 percent and 0.50 percent, respectively. However, the European Central Bank diverged by slashing its Minimum Bid Rate down to 0.15 percent, when the market was expecting a reduction to 0.10 percent.

In the United States, the Non-Farm Employment Change came nearly in line with expectations (217,000 versus 214,000 forecast). Unemployment Rate for May remained at 6.3 percent. The April Trade Balance, meanwhile, reached -$47.2 billion, the worst reading in over 2 years, as exports decrease 0.2 percent and Americans increased purchase of business equipment, automobiles and consumer goods made from abroad.

Meanwhile, Australia had a very rough week with the release of some surprisingly weak economic readings. Building Approvals for April surprised with a 5.6 percent decline, its third negative monthly reading in a row. Trade Balance declined for the first time in 5 months (-AUD0.12 billion versus AUD0.40 billion forecast). On the bright side, Company Operating Profits, Current Account, and GDP came in better than forecast.

 Commodities

Gold had a very uneventful week after posting a decline of over $50 during the prior week. Gold traded within a very tight $17 range this week, bobbing up and down on both sides of $1,250. Bulls would likely push for a move back to the $1,300.

The bearish inside week in the previous week paved way to another sell-down this week. However, the reversal on Thursday gave some life to price and helped reduce the bearish casualty this week. If we don’t see a retest of the 101.50 next week, we could see another test of $104.

Currency Pairs

The extreme volatility on Thursday in EURUSD ended with a bullish tone as Draghi and the ECB decided to cut rates less than expected. This enabled the pair to clinch its second consecutive bullish week. If momentum continues next week, we could see price gain back toward 1.3800.

GBPUSD posted a bullish inside week just above the 1.6800 level. It was a clear win for bulls, as continued decline through 1.6700 would force a move toward 1.6500. Buyers must take out resistance just above the 1.6900 level.

We finally saw a considerable upmove in USDJPY after last week’s silent trading below the 102 level. The pair posted 4 bullish daily closes this week, and it nearly reached the 103 level in the process. Based on recent price action, we could see bulls challenge sellers beyond 104.

The Week Ahead

On Monday, the news releases will be very few: Japan’s Current Account, Bank Lending, and Final GDP; and Canada’s Housing Starts. Today, some states in Australia will observe the Queen’s Birthday, while France, Germany, and Switzerland will observe Whit Monday.

On Tuesday, there will be UK’s BRC Retail Sales Monitor; Japan’s Tertiary Industry Activity; Australia’s NAB Business Confidence and Home Loans; China’s New Loans, CPI and PPI; France’s Industrial Production; UK’s Manufacturing Production; and US JOLTS Job Openings.

Wednesday will be very brief and start early with Japan’s BSI Manufacturing Index, Australia’s Westpac Consumer Sentiment; New Zealand’s REINZ HPI; UK Unemployment Rate and Claimant Count Change; US Federal Budget Balance.

Thursday will be the most news-packed day this week with the release of Reserve Bank of New Zealand’s Rate Announcement, Statement, Press Conference, and Monetary Policy Statement; Australia’s Employment Data and MI Inflation Expectations; 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 Statement; China’s Industrial Production and Fixed Asset Investment; Canada’s Manufacturing Sales; US PPI and Preliminary UoM Consumer Sentiment.

The latest Japan Core Machinery Orders, a measure of new private sector purchase orders for machines, jumped three times its estimate in March. Orders increased 19.1 percent versus 6.1 percent forecast, and the previous month’s revised -4.6 percent.

In the United Kingdom, the MPC Asset Purchase Facility and Official Bank Rate votes remained unchanged. Meanwhile, Consumer Price Index rose 1.8 percent in April following a 1.6 percent gain in March. On the other hand, PPI Input dropped 1.1 percent during the same month. Retail Sales rose 1.3 percent.

In other news, the Flash Manufacturing PMI for Japan, China, and the US fared better than estimates, while that for Germany, France, and the Eurozone were all weaker than expected.

In the United States, Jobless Claims for the prior week increased more than anticipated (326,000 versus 312,000 forecast). Existing Home sales rose less than expected, but New Home sales were better in April.

Commodities

Gold continues to trot along close to the $1,300 level just as it has done for more than five weeks now. The stakes become higher as the price range got narrower this week. $1,260 and $1,320 are the key areas of concern. Bulls and bears need to break one of these areas very soon.

Oil printed its second weekly bullish close after a successful break of the $104 finally stuck on Friday. Price is now poised to break northward ahead of stronger resistance in the $108-$112 area.

Currency Pairs

EURUSD saw terrible price action for the third straight week as buyers failed to regain control of the 1.3700 level. Although the weekly trading range was narrow, this pair is still at risk of continuation downmove toward 1.3300-1.3400.

GBPUSD ended the week lower as the 89-pip upside attack through the 1.6900 last Wednesday has been extinguished completely by declines seen on Thursday and Friday. Sellers sent the pair back below 1.6900 and closed the week in the 1.6830s. Bulls need to stop this and defend the 1.6800 level. Otherwise, GBPUSD could run the risk of moving below 1.6600-1.6700 again in the coming weeks.

USDJPY secured its first bullish weekly close this week thanks to three straight daily gains up until Friday. The pair made a dash northward on Wednesday after price bottomed out at the low-100.80s. The dash higher fell short of closing above the 102 level, though. Next week, this pair needs a strong close above the 103 and attack potential sellers in the mid-104s.

The Week Ahead

Monday will again be a very brief news day as the UK will observe the Spring Bank Holiday, while the United States observe Memorial Day. Critical news to watch out for today will be New Zealand’s Trade Balance; BOJ Monetary Policy Meeting Minutes; Gfk German Consumer Climate; and ECB President Draghi’s speech.

Tuesday will start during the European session with Switzerland’s Trade Balance and Employment Level; UK BBA Mortgage Approvals; US Durable Goods Orders, S&P/CS Composite-20 HPI, CB Consumer Confidence, and Richmond Manufacturing Index.

BOJ Kuroda’s speech will open up Wednesday’s Asian session, followed by the release of New Zealand’s ANZ Business Confidence; Australia’s Construction Work Done; France Consumer Spending; Germany’s Jobless Change; Eurozone M3 Money Supply; Spain’s HPI; and UK CBI Realize Sales.

Thursday will start quite early with Japan’s Retail Sales; Australia’s Private Capital Expenditure; Canada’s Current Account; US Preliminary GDP, Jobless Claims, and Pending Home Sales. France, Switzerland, and Germany will observe Ascension Day.

This coming Friday, we will have New Zealand’s Building Consents; Japan’s Household Spending, Prelim Industrial Production, and Tokyo Core CPI; Germany’s Retail Sales; Canada’s GDP and RMPI; US Core PCE Price Index, Personal Income, Personal Spending, Chicago PMI, and Revised UoM Consumer Sentiment.