WINDSOR BROKERS

Market Outlook for 3rd June 2016

Caution prevails in the markets ahead of US jobs report, due later in the day, with the US dollar being in a mixed mode against its major counterparts. The greenback holds just above two-week low against Japanese yen and maintaining strong tone against Euro and British Pound.
Renewed Brexit fears keep Sterling under pressure while the Euro remains at the back foot, as investors were disappointed by ECB’s rather dovish tone and decision to refrain from making any material change to its policy.
Most of currency pair already entered sideways mode, awaiting results of US jobs data, which are expected to give more clues about Fed’s rate hike decision. US Central Bank advertized rate hike as early as June, however, a number of market participants does not expect any action before Great Britain’s Brexit vote.
Yesterday’s OPEC meeting ended as expected without any agreement in output targets. Iran insisted in raising production to regain market share after years of sanctions, while Saudi Arabia pledged not to flood the market with more oil.
Brent Oil holds above $50 level, while WTI oil is still below psychological barrier, after recent double rejection to break higher. However, WTI price bounced off fresh lows, remaining within near-term range and awaiting trigger for fresh direction.
Gold was little changed in early Friday’s trading, holding above fresh multi-month low, in near-term consolidation range, but on track for the fifth consecutive weekly close in red. Yellow metal is awaiting US jobs data, with dollar-supportive release expected to send price below psychological $1200 support.

Today’s highlights

Another day with long calendar, with series of Services PMI data being the highlight of European session. Forecasted numbers are mainly unchanged from previous month’s releases.
Today’s focus is on US jobs data. Forecast for Non-Farm Payrolls for May, holds around previous month’s release, but employment growth should be strong to confirm a tightening labor market and push the Federal Reserve closer to raising interest rates soon.
Forecast for NFP for May is at 164K vs April’s 160K, while Unemployment rate is seen ticking down to 4.9% in May, compared to April’s 5.0% release.
US Trade gap is forecasted to widen in April on forecasted -41.3 B, compared to -40.4B in March.
Data are due at 12:30 GMT

Important levels

EURUSD is under pressure again after yesterday’s rejection at 1.1215 barrier and daily close in red. The pair trades within narrow range above 1.1140 low and shows increasing downside risk for fresh attack at key 1.1100 support zone.
Initial resistance lies at 1.1157, followed by 1.1170/90 and pivotal 1.1215/40 barriers.

USDJPY remains under pressure, with near-term price action consolidating above fresh low at 108.48, following past three days close in red. Bearish technical studies favor further weakness, however, US jobs data may provide fresh support for the dollar.
Next supports lay at 108.20 and 107.80, while session high marks initial resistance at 109.12. followed by 109.56 and strong 109.95 barrier and upper pivot, daily Tenkan-sen line.
GBPUSD remains in narrow consolidation above fresh low at 1.4385. Technicals are bearish, with limited upside action expected to precede final push towards key 1.4330 support. US data are expected to trigger fresh action. Initial resistances lay at 1.4445/70, followed by 1.4500/20 and 1.4450/60 pivots.

GOLD trades in extended consolidation above fresh low at $1200, where solid support was found. Overall structure remains bearish, following past four day’s close in red and sees risk of final break below $1200 support for fresh bearish acceleration. Upside attempts were so far limited, keeping initial barrier at $1224 intact.
US data are expected to move gold price from one-week congestion and signal fresh direction., Daily Market Outlook