NFP Breathes Life back into USD
Friday’s payrolls report came in the midst of speculation that the labor market was cooling. This sentiment was set after a weaker than expected private payrolls report.
However, investors were in for a surprise when the payrolls for November rose by 266,000. The previous month’s payrolls were revised higher to 156,000.
The official unemployment rate fell to 3.5%, down from 3.6% earlier.
Euro Slips as Dollar Closes Higher
The jobs report helped the greenback close the day on Friday with gains. This was the first positive close after nearly five consecutive sessions of declines.
Economic data from the eurozone was sparse on Friday. As a result, the NFP was the major driver of flows in the EURUSD.
EURUSD Loses the 1.1100 Handle
The currency pair’s rally to the 1.1100 price level hit a snag after the jobs report. As a result, the euro pared gains, turning lower on the day.
In the near term, price could retest the minor support level at 1.1072 which was breached. A successful retest of this level for resistance could push the euro lower. The next lower support is at the 1.1000 handle.
OPEC Announces Deeper Production Cuts
OPEC members including Russia concluded their semi-annual OPEC meeting in Vienna last week. The cartel of oil-producing nations announced even deeper cuts at the meeting which concluded on Friday.
Oil production is set to be cut down by a further 500,000 barrels until March 2020, bringing the total production cuts to 1.7 million barrels. Oil prices rose as a result of the OPEC decision.
WTI Crude Oil at a 3-Month High
Oil prices were bullish, with the price action over the past week indicating that traders were anticipating the bullish news. By Friday’s close, WTI crude oil settled near a three-month high, closing at $59.08. This was after the intraday rally pushed oil to highs of $59.81.
In the near term, oil prices could pullback to the support level of the 57.87 – 57.64 region. But further could come if this support holds.
Gold Slips on Jobs Data
Gold prices fell over 1% on Friday after the blockbuster jobs report. On all front, the payrolls report came out better than forecast.
Wage growth was the only blot, easing to 3.1% on an annual basis, down from 3.2% in October. The solid jobs report now pushes the possibility of a Fed rate cut further down the line.
XAUUSD Could Maintain Bearish Momentum
As XAUUSD broke below the support level of 1460, the Stochastics indicator is pointing to a possible reversal. However, we expect to see the 1460 level being retested once again for resistance.
If this level holds, then XAUUSD will be on track for a move lower to the 1445 level of support in the near term.