By Orbex
The US dollar index fell sharply on Friday extending the declines from earlier in the week. The declines came as the payrolls report for May saw the US economy adding the lowest number of jobs for the second consecutive month. The US payrolls report, which was once the bright spot in the economy showed a decline with the US hiring adding just 75,000 jobs. But the jobless rate was steady at 3.6%.
The euro currency was seen posting strong gains as the common currency rose to a three-month high. The gains in the euro came about mostly on a weaker USD. Economic data from the Eurozone was limited. French industrial production figures saw a 0.4% increase beating estimates of a 0.3% increase. But Italian retail sales stayed flat against estimates of a 0.2% increase.
The breakout in the currency pair above the 1.1250 level marks a modest milestone. The next main target for the EURUSD will be the 1.1400 region. This level was previously tested for resistance. Further gains in the currency pair will likely see a retest of this level in the near term. To the downside, the support at 1.1250 could be tested. This correction could potentially attract new buyers into the market.
Oil prices were seen attempting to maintain the bullish gains from Thursday. Price tested a four-day high of 54.38 before retreating by Friday’s close. There are some early indications that price is bottoming out. But at the same time, there are also risks that oil prices could break down from the current pivot lows that are formed.
The main resistance level is seen at the 57.50 handle. Therefore, this makes a likely price level that oil prices could correct to in the near term. With the OPEC meeting due in the last week of June, oil prices could be subject to some volatility. The downside target of 50.00 remains within sight for the moment, making it the likely downside target.
Free Reports:
Friday’s payrolls report gave a jolt to gold prices which enjoyed a stellar rally last week. The gains came about as investors now expect the Fed to cut rates this year. While there has been speculation about the rate cuts, this view gains traction in light of the recent weakness in the labor market. Gold prices tested highs of 1348 on Friday before retreating modestly lower by Friday’s close.
The recent gains in gold prices have been sharp and rapid. There is scope that price could correct in the near term. The initial support is seen at the 1320 handle which could offer support in case of a correction. However, for this to happen, the current momentum needs to slow. Watch for potential divergences near the current highs which could signal a possible dip to the 1320 level in the near term.
By Orbex