Midday Brief – Focus shifts to August US Jobs data report

The markets were risk-on as investors priced in on a softer dollar ahead of US jobs data. Near-term bulls remain cautious as Fed tightening sentiments looms. Crude oil markets rallied as demand strengthens and traders pay close attention to the G7 meeting. Nord Stream pipeline set to resume operations offering market relief.

NZDUSD gained +0.19% in the European session as dollar softened. The green back lost some ground after hitting multi-year high ahead of US Nonfarm Payrolls. The jobs data is expected to print 300,000 for August vs a previous reading of 528,000.

This data could help determine the Fed’s rate decision for September as stronger figures may make the Fed more aggressive. The pair bounced off 0.6050 support and critical levels to watch out on the rally are 0.6100, 0.6120 and 0.6135. A break below 0.6000 could invalidated the bullish move.

EURJPY soared by +0.67% as positive German trade balance lifts the Euro. The German Trade balance rose to 5.4Billion vs 4.8Billion expected though it was less than previous at 6.2 Billion. The Spanish Unemployment Change surged to 62.1K from a previous 3.2K. The EUR was stronger against the Yen despite mixed data.

The markets are pricing in a 75BPS hike by the ECB adding to the 50BPS of previous meeting while the BoJ maintains an ultra-loose policy weakening the Yen against its major rivals. Above the 140.500 current resistance the pair could retest 141.00 and 141.50.

GBPCAD maintains a steady move amid rebounding oil prices though the CAD failed to capitalize on upbeat oil prices. The pair is trading at +0.03% with reports that UK companies have stepped up on recruitment. The country saw 2.08M job ads last week which is the highest on record.

Canada’s GDP on Wednesday dropped to 3.3% in Q2 and building permits on Thursday fell to -6.6% broadly pinning down the CAD. Traders shift their focus to CAD’s Labour Productivity [QoQ] Q2. The pair is currently trading a few pips above 1.5200 after establishing a low at 1.51800. Further up bulls may reclaim 1.52500 and 1.52800.

European stocks were trading in a mixed manner mid-European session as Nord Stream is said to resume on Saturday. FTSE100 was up +0.12% with an intraday low residing at 7150. Upside move is capped by 7260. CAC 40 declined by -0.37% ranging between 6090 and 6040. The index may face a rejection at 6150 on a continued rally while bears may reclaim 6000. DAX is steady with gains of +0.08% and bullish cap at 12880.

US stock futures were trading flat ahead of US jobs data release in the New York session. The DJIA index futures were trading at +0.02% with bullish moves being capped by 31700 support-turned-resistance. The S&P500 futures were down -0.01% in a range between 3950 and 3970. Bulls may seek the 4000 and 4050 levels. US 100 futures declined by -0.09% though still trading above 12000. Targets may be set at 12800 on the bullish run. 

Crude oil prices are trading in positive territory as the G7 is set to meet today to further discuss the price cap on Russian oil. The black liquid rebounded after a 3-day losing streak over demand concerns and global growth concerns. The USWTI rose +1.94% after establishing a low at $86.20/b. The bullish move is currently capped by $90.00/b which coincides with the 20Day SMA. A further decline may give bears $85.00. Brent appreciated by +1.75% from $92 a further rise is capped by $98.