DST Changes

Daylight Savings ended yesterday for the U.S. and Canada where the clock goes back an hour. Traders need to be aware as it will change the market hours in their respective local times. 

Economic Calendar

Monday- No Major Events

Tuesday- No Major Events

Wednesday- No Major Events

Thursday- US CPI

Friday- UK GDP, Canada and US Bank Holiday

260k new jobs were added to the U.S. economy based on last week’s NFP, beating expectations by 60k which is technically good news for the dollar. However, the dollar slumped against most other major currencies including Euros, Pound and also precious metals like gold  and silver following the news. Not only that, but the decline also wiped off its recent gains fueled by the FOMC’s meeting and their hawkish statements, leading to questions on whether the greenback’s strength has peaked. 

The data is on the lighter side this week, with the main focus being on US CPI which is scheduled for Thursday. A stronger than expected inflation data may provide some hope for the dollar’s bull and more space for the Fed to work their tightening policies. Though we should be reminded that Powell did mention during the conference that the scale of future hikes may decrease.

*The US midterm election on Tuesday may add volatility to the markets. 

EURUSD

EURUSD Daily

There was a significant shift in market direction last Friday which was also the NFP day. The Euro rebounded heavily against the dollar, with the daily candle closing at a high near 0.9960, engulfing the previous 4 day’s worth of bearish movements. Stronger services PMIs, a  relatively hawkish tone from ECB Lagarde during her speech coupled with a miss in US employment rate could be the catalysts for the outsize price advance. 

Today, the pair gapped lower only for the gap to be filled during the London Open, reinforcing the bullish strength of Euros in the short-term. 

With that being said, our preference tilted to the upside, with technicals suggesting a bounce from its bullish trendline and also neat engulfing pattern on the daily timeframe. Traders should keep an eye on the CPI data later this week.

Energies

Crude Oil

Crude Oil Daily

US Oil got a significant boost last Friday on the rumors that China is easing restrictions related to Covid-19. However, the hopes faded as China denied such claims and reaffirmed that they will stick to their covid-zero policy, leading to price gap upon Asia’s open this morning. 

On the technical front, US Crude was approaching the 93.30 previous swing high resistance but the momentum seems to die down slightly for the aforementioned reason. 

USDJPY

USDJPY H4

Following up on our previous analysis, USDJPY broke out from its triangle pattern to the South as the dollar retraced. There is still some free range for the pair to follow through until its next support near 145 key level. CPI remains the key driver for the pair this week.