The US dollar pulled back slightly on Monday morning as investors reacted to strong jobs data from the United States. The numbers revealed that the country added over 372k jobs in June, higher than analysts were expecting. The unemployment rate remained unchanged at 3.6% while wages rose by over 5% again. Now, investors are waiting for the upcoming American inflation data scheduled for Wednesday this week. Still, analysts believe that these numbers will not change the Fed’s decision on interest rates. Analysts expect that the bank will press on with a 0.75% rate hike followed by a 0.50% increase in September.
American stock futures moved sideways as investors positioned themselves for higher interest rates and the upcoming earnings season. Some of the biggest American banks will start publishing their earnings this week. Some of the banks expected to publish this week are Wells Fargo, Citigroup, and JP Morgan. Companies in other industries will also publish their results. Some of them are Delta Air Lines, PepsiCo, and UnitedHealth. Analysts expect the results to show that companies had a difficult quarter as demand waned and as the strong dollar hurt their overseas results.
The economic calendar will not have major events today. Earlier, New Zealand published relatively weak electronic retail sales, signaling that inflation was having an impact on shopping behaviours. The data came two days ahead of the upcoming interest rate decision by the Reserve Bank of New Zealand (RBNZ). The other important event to watch will be the upcoming statements by Bank of England’s Andrew Bailey and Federal Reserve’s John Williams. Williams’ speech will come two days after he said that the Fed was fully committed to a 2% inflation.
XAUUSD
The XAUUSD pair continued its bearish trend after the latest strong US jobs data. It dropped to a low of 1,742, which was the lowest level in months. The pair retreated below the important support at 1,784 and all moving averages. Similarly, oscillators like the Relative Strength Index (RSI) and the MACD have moved below the oversold level. Therefore, the pair will likely keep falling as sellers target the support at 1,700.
EURUSD
The EURUSD pair has been in a strong sell-off in the past few days as investors priced in a more hawkish Federal Reserve. It dropped to a low of 1.0067, which was the lowest level in decades. On the daily chart, the pair remains below all moving averages. It has also moved below the important resistance point at 1.0358 while the Average Directional Index (ADX) has risen to its highest point in months. The pair will likely have a pullback on Monday since it has formed a hammer pattern on the daily chart.
XNGUSD
The XNGUSD pair pulled back as repairs for the Nord Stream 1 project continued. The pair rose to a high of 6.011, which was the highest point since July 4. It has moved slightly above the 25-day moving average while the MACD and the momentum oscillators have continued rallying. Therefore, the pair will likely continue rising as bulls target the key resistance at 6.60.
