Mixed Payrolls Report Sends USD Weaker
The US dollar was seen closing red on Friday, but the declines were modest. The payrolls report for August was mixed. While the US economy failed to meet the median estimates on payrolls, the wage growth was prominent. The US economy added 130k jobs in August. Revisions to July’s data saw payrolls at 159k. The average earnings, however, rose 3.2% on the year and rising 0.4% on the month.
Eurozone Growth Falls More than Half in Q2
The second-quarter GDP in the eurozone was confirmed to have risen just 0.2% on the quarter ending June 2019. The data sees GDP growth slowing by half, comparing to the first-quarter GDP report. Meanwhile, the quarterly employment change was confirmed at 0.2% on the quarter. While the euro fell initially on the news, the mixed jobs report managed to help the common currency to recover.
EURUSD Fails to Break Above Resistance
The EURUSD currency pair managed to briefly rise above the resistance area of 1.1033. The gains came mostly due to the volatility in the US dollar. However, following the payrolls report, the currency pair was seen easing back lower. We expect the consolidation near 1.1033 to continue in the run-up to the ECB meeting this Thursday.
Investors Eye Vote on Early Election in the UK
The pound sterling was seen trading subdued on Friday, capping a week which saw the currency posting gains. With the debate on the general elections set to take place this week, the currency pair has held out near the weekly highs. With lack of any economic reports coming out on the day, investors were seen focusing on geopolitics.
GBPUSD at Risk of Correcting Lower
GBPUSD saw the rally stalling on Friday. The currency pair was modestly trending lower on the intraday charts. Given the outcome of the developments in UK politics, the currency pair could turn volatile. The bias remains to the downside for the moment. GBPUSD is likely to test the support at 1.2170. Forming support at this level will likely reignite the upside bias.
Gold Declines But Holds Steady on Powell’s Comments
The precious metal posted modest declines by Friday’s close. This came despite the mixed bag from the August payrolls report. Fed Chair Jerome Powell also spoke late on Friday. Powell warned that central banks will have less ability to countercyclical downturns if interest rates are low. Powell’s comments come ahead of the Fed meeting in two weeks’ time.
Can XAUUSD Bounce Off the Support?
The precious metal was seen testing the support area of 1508 firmly on Friday. With the Stochastics oscillator near the oversold level, there is scope for XAUUSD to push higher. At the same time, price could also drop off the support level. However, a lower high being formed will confirm the downside in gold.