The pair regained traction and is pressuring daily cloud base again after dipping to 107 in early Asian trading on Friday, as US President Trump shook the markets by threats for additional tariffs on China.
The impact on the pair from Trump’s comments which threatened to escalate trade tension between the US and China, was so far limited, as bullish structure remains intact and keep focus at the upside.
Strong bullish acceleration in past three days resulted in marginal close above falling 55SMA and cracking the base of thick daily cloud, signaling that bulls could extend further on firm break through these pivotal barriers.
Close within widening daily cloud would be bullish signal for extension of recovery leg from 104.63 (26 Mar low) towards targets at 107.90/97 (21 Feb high/Fibo 38.2% of 113.38/104.63 fall).
Bullish setup of daily MA’s (double bull-cross – 10/20 & 10/30SMA has formed) and strong bullish momentum, maintain bullish bias, however, overbought slow stochastic suggests bulls may hold in extended consolidation.
Former top of 28 Mar and overnight’s low at 107 mark initial support, which was so far able to contain attacks, guarding Thursday’s low at 106.71 and rising daily Tenkan-sen at 106.40.
US labor data is the key event today and would likely generate strong direction signal.
Growth of US jobs likely slowed in March, according to the forecast for 193K new jobs, compared to surprise jump to 313K in February.
Analysts expect March’s job growth to remain below the average of the past three months (242K) but to remain firm and well above 100K, which marks the border line between growth and contraction in the sector.
The unemployment is expected to fall to 4.0% in March (the lowest since Dec 2000).
Investors will be focusing earnings numbers, as wages are still the weakest point in tight labor market.
Forecast shows increase of Average Hourly Earnings by 0.3% in March, compared to 0.1% increase previous month, with upbeat wages data expected to boost the dollar.
Res: 107.50, 107.97, 108.28, 108.67
Sup: 107.29, 107.00, 106.71, 106.40
