USD Settles Lower Despite Unemployment Rate Setting New Record

Intraday Technical Analysis 06 May 2019

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Friday’s nonfarm payrolls report saw the US unemployment rate falling to the lowest levels since 1969. Data from the labor department showed that the unemployment rate fell to 3.6% from 3.8% in March.

Payrolls rose 263,000 in April while average earnings rose 0.2% on the month. The market sentiment was hit as the soft services PMI data overshadowed the payrolls report. The USD fell 0.36% on the day by Friday’s close.

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Eurozone Inflation Estimates Rises in April

The flash inflation estimates from the eurozone for the month of April beat estimates. Data from Eurostat showed that headline inflation rose 1.7% on the year in April. This beat estimates of a 1.6% increase. April’s inflation also came out stronger than 1.4% print from March. Core inflation rose 1.2%, beating estimates and advancing from 0.8% from the month before.

EURUSD Could Continue Trading Flat

The common currency caught a bid as price initially slipped lower to test the support level at 1.1140. Price was quickly rejected at this level as it led to a strong rebound. The euro gained over 0.19% on the day on Friday. However, the sideways range could continue. The resistance at 1.1226 could still keep a lid on the gains. Unless the common currency breaks out from this range, we expect to see the price action in euro staying muted.

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WTI Crude Oil at a 4-Week Low

Oil prices slipped to a four-week low, testing 61.48 before pulling back modestly on the day on Friday. The declines in oil prices continue amid concerns of oversupply. US crude oil inventories have posted a bigger than expected draw which offset the supply shortages in pipelines from Russia.

Oil Likely to Rebound from 60.33

After breaking past the support level at 62.85, oil prices fell before pulling back from the lows. On today’s open, oil prices gapped lower to test the 60.33 support. A rebound from this support level will keep oil prices trading flat within 62.85 and 60.33 levels in the near term.

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Gold Rebounds on Renewed Trade Threats

The precious metal gained 0.66% on Friday after initially falling below the 1273 level of support. The rebound in gold came as the ISM’s non-manufacturing PMI fell to a year and a half low. The non-manufacturing index fell to 55.5 in April as it extended declines from 56.1 in March. Over the weekend, President Trump renewed his threat about raising tariffs on China. The comments come as US and China trade talks head into a crucial week.

Can Gold Sustain the Bullish Momentum?

The strong surge in gold prices saw the precious metal firmly establishing support near the 1273 region. Price is now trading close to the main resistance level of 1285. On the daily chart, we see that gold prices remain firm, off the 200-day moving average. Overall, gold prices could maintain a sideways range, unless we see a breakout above 1285.gold

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