US Stock Markets At Historic All Time Highs...
Can the Upside Momentum Continue or will the bears emerge to take over control??
Today's US Non-Farm Payrolls (NFP) data release may provide the clue for stock, currencies and commodities direction....
NFP Preview
- Nonfarm Payrolls measures the change in the number of people employed during the previous month, excluding the farming industry;
- Job creation is the foremost indicator of consumer spending, which accounts for the majority of economic activity;
- A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD;
NFP Forecast for June: 160,000 new jobs
- Previous 75,000 new jobs created in the month of May
- Yesterday’s ADP jobs report showed small gains in US payrolls; indicating that tomorrows NFP might have a positive outcome;
Summary: Average job gains are lower in 2019 then during 2018
- US Job growth in health care; professional and business services has so far continued to trend higher, however;
- Monthly job gains have averaged 164 thousand in 2019, compared with an average gain of 223 thousand per month in 2018; indicating slowing trend in US overall job growth;
Upcoming earnings:
- Monday after market close Grupo Televisa earnings due; forecast to earn MXN 0.341 cents per share; the company is largest producer of Spanish language media; according to Bloomberg the share price is trading at an unusually high discount versus peers; Bloomberg consensus price target is MXN 55.20 per share; 70% higher than the current stock price MXN 32.50;
- Tuesday after market close Levi Strauss & Co. earnings due; forecast to earn $0.125 cents per share on $1.293 billion in sales over the last 3 months; current price $21.79; 12 month target is $25 according to Bloomberg analyst consensus;
Charts
Crude Oil (CL) down -4.6% last 5 days; prices fall on slowing demand; global economic uncertainty; this weeks lower than forecasted drop in US crude oil inventories raises concerns that increasing oil inventories are a sign on slowing demand; current price $56.71 holding just above the $56.60 support; a break below opens up next leg down towards the $53.50 support; otherwise provided buyers are willing to offer price support above the $56.60’s a re-test of the $60.50 resistance cannot be ruled out.
EUR/USD current price in multi-month uptrend that started in May; current price 1.1275 down -98 pips last 5 days; risk reward trade ahead of today’s NFP +175 pips / -121 pips from current price. Upside 1.1450 / Downside 1.1150; downside pressure seen after German Factory Orders fell -2.2% versus estimate decline of 0.2%;
Gold price trending higher since May’s $1,270 low; current price $1,414.20 +6.3% last 30 days; risk / reward trade ahead of today’s US NFP; near +5.23% upside towards the $1,490 price extension; downside near -2.54% from current price $1,414.20 towards the $1,382 support; recent gold price finding buyer support on speculation that lower US interest rates will create demand for gold on the back of a potentially weaker US dollar;
German DAX trending higher after breaking above the 12,040 resistance; current price 12,622; provided 12,600 can be established as a valid support level further advance higher towards the 12,970 price extension cannot be ruled out; RSI indicates strong upside momentum; however traders should be on alert for a potential downside move if RSI is to cross below the 70 signal line;
SP500 Index in multi week uptrend; higher tops and higher bottoms on price; moving average analysis is bullish since current price is above the 4,9 and 18 periods; RSI is bullish since it has crossed above its own 15 period moving average as well as the 70 RSI signal line; provided upside momentum can remain intact i.e. RSI can hold above 70; price extension towards the 3,019 to 3,103's cannot be ruled out; however provided the highs near 3006 can not be overcome a re-test lower towards the 2961 support remains on the table;
Source: FXGM / Bloomberg