US Employment Data due to be released today.

The highlight of the day will most likely be the US Employment Data, with the  data expected to weaken the greenback according to analysts, yet the JOLTS job openings and ADP Non-Farm Payrolls figures, exceeded analysts’ expectations with the ADP Non-Farm Payrolls coming in at 278k whereas it was expected to be reduced to 170k.Following recent statements by Fed policymakers such as Philadelphia Fed President Harker, traders may be looking to see whether or not the Unemployment rate ticks up higher than what is anticipated by market analysts. As such, traders eagerly await the release of the data which is due during today’s American session. During Yesterday’s American session the ISM Manufacturing PMI figure for May came in lower than expected, hence spiking worries of a continued deterioration in the US economy and as such weakened the greenback against its counterparts. Furthermore, we note the fact that the US Senate voted in favour to raising the debt ceiling as was expected, thus potentially avoiding a catastrophic US default which may have been as soon as Monday. Across the pond, during yesterday’s European Session we note the release of the Eurozone’s Preliminary HICP rates, upon which it appeared that inflationary pressures in the Eurozone appear to be easing. Yet we note that ECB policymakers have re-iterated that the bank may be near its terminal rate, but it still has some way to go, as ECB President Lagarde re-iterated that “inflation is too high”. In addition to the ECB May Meeting Minutes, indicating that a number of policymakers favoured  a 50-basis point hike, further supporting the common currency, as it appears that the fight against inflation still has some way to go .BOJ Governor Ueda, during today’s Asian session, hinted that the bank would maintain its ultra loose monetary policy, as  the bank anticipated CPI to be noticeably reduced by the middle of this fiscal year, thus reducing the need to abandon the decades long YCC policy. Turkish President Erdogan, may appoint Darling Simsek to join the Government as Treasury Finance Minister, according to Bloomberg , hinting a return to orthodox economic policy in Turkey, which could support the Lira should the appointment be officially confirmed by the Government on Saturday.

AUD/USD continued its upwards trajectory, as the dollar weakened. We maintain our bullish outlook for the pair as long as the upwards trendline remains intact, in addition to the RSI indicator remaining above 50. For our bullish outlook to continue, we would like to see the pair make a clear break above the 0.6660 (R1) resistance level with the next potential target for the bulls being the 0.6730 (R2) resistance ceiling . On the other hand, for a bearish outlook, we would like to see the pair make a clear break below the 0.6595 (S1)  support level which would coincide with the breaking of the prementioned upwards trendline, with the next possible target for the bears being the 0.6505 (S2) support base. 

XAU/USD, appears to be moving in a upwards motion and is currently testing resistance at 1980 (R1) and supporting our case is the RSI indicator below our 4-Hour chart which currently registers a figure above 50, implying a bullish market sentiment. For our bullish outlook to continue, we would like to see a clear break above the 1980 (R1) resistance level, with the move towards resistance at 2005 (R2).For a bearish outlook, we would like to see a clear break below support at 1955 (S1) with the next possible target for the bears being the 1930 (S2) support base. For a neutral outlook, we would like to see the precious failing to break above resistance at 1980(R1) and remaining within the 1955 (S1) and 1980 (R1) bounds.

Other highlights for the day:

Besides today’s US employment report for May we expect no major financial releases for the day. During Monday’s Asian session, we note the final services PMI figures of Japan and Australia as well as the Caixin services PMI figure all being for May. Oil traders on the other hand may be more interested in the OPEC+ meeting over the weekend.

AUD/USD H4 Chart

Support: 0.6595 (S1), 0.6505 (S2), 0.6415 (S3)

Resistance: 0.6660 (R1), 0.6730 (R2), 0.6815 (R3)

XAU/USD H4 Chart

Support: 1955 (S1), 1930 (S2), 1905 (S3)

Resistance: 1980 (R1), 2005 (R2), 2035 (R3)

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