Midday Brief – Markets await the US Jobs Data

The US Dollar is stronger as investors await the NFP data due for the New York session. Gold prices drop amid Dollar strength and the Fed`s hawks are confident about a 75bps hike in July underpinning the anti-fiat metal.

The EUR bears target the parity level as policy divergence widens with the greenback. Former Japanese Prime Minister Shinzo Abe died early European session after being shot at a political rally.

GBPCAD suffered losses of -0.13% ahead of Canada`s employment data. The employment change for June is expected to drop by 16.3K from a previous reading of 39.8K while the unemployment rate is surveyed to remain unchanged, and this may underpin the CAD strength.

The political uncertainty in the UK is weighing on the currency as former Prime Minister Boris Johnson’s plans to remain caretaker PM are under threat. The pair established a high at 1.5650 and a break above may give in to 1.5800. However, bears may seek to revisit 1.52783.

USDJPY is recovering from early morning losses ahead of the NFP data. The JPY’s current account data for May missed expectations of 0.186T and settled at 0.128T.

Investors shift focus to the US NFP despite being forecasted to drop to 268K from 390k. Average hourly earnings are expected to also drop by 0.1% to 5.0% YoY. These expectations may weigh down the Dollar’s strength. The pair lost by -0.06% with a low residing at 135.36 and upward pressure is capped by 136.00.

EURCHF gained +0.13% despite disappointing Eurozone data. The French trade balance dropped to -13.0B from the previous -12.8B. Italian Industrial Production YoY came in at 3.4% vs 4.0% expected.

The pair is up from a low at 0.9868 and targets may be seen at 0.9950 and 1.0000 in the short term. Traders shift their focus to ECB’s Lagarde speech and EU Economic Forecasts where the country’s economic performance will be analysed.

European stocks were caught up in the global selloff as it shades off early Friday’s gains. The DAX slipped by -0.46% below 12 885 daily resistance and targets may be seen at 12 600 and 12 400 in the short term. The FTSE100 is down -0.58% amid political uncertainty in the UK. The index is capped by 7214 to the upside and key areas to watch out for are 7120 and 7070 support levels.

The CAC40 dipped by -0.69% following a disappointing France trade balance report which came at -13.0B against -12.8B expected. Capped by 6021 resistance, the index may target 5941 and 5900 in the near term.

US stock futures dipped amid recession fears. DJIA Index futures are flat at -0.05% trading between 31 400 and 31 242. S&P500 futures are down -0.16% with resistance at 3904 and a bearish move may target the 3860 area. Nasdaq100 futures dropped by -0.32% after bears managed to defend the 12 100 level. Further down bears may reclaim 1200 and 11950.

Gold prices remain vulnerable to a stronger Dollar amid risk aversion. The Fed’s hawks are pushing for a 75bps hike in July which will underpin the precious metal. The yellow metal is down -0.20% away from 1746.50 intraday resistance. A break of the 1732.63 low may renew bearish interest towards 1680.