US Non-farm payrolls amounted 222 000 in June, well above expectation of 178 000.

However, average hourly wage grew only 0.2% that is worse than expected. This may have Fed postpone it’s hike rate plans until stronger data and in particular earnings growth.  However, weak earning data did not put pressure on the USD, as stronger job growth reflected improvement in US economy. This week data on inflation and retail sales are the keys to further USD dynamics. Yellen is likely remains on a hawkish course of steadily rising rates.

EURUSD

In General

EUR may be stronger in the shortest term and gain to 1.1600 and higher but may resume decline in the medium term

Fundamental

Looks like given all Trump’s difficulties with Congress, US will not be able to implement promised tax reforms in the short term meanwhile European economy is showing signs of stronger momentum. Besides there are talks ahead in the market that ECB may cease its purchasing assets program.

Technical

Expected profit taking and followed correction did not realize as the pair stayed well above 1.1310- the closest support level. In fact, longs intensified and brought pair up to 1.1490- the upper level of middle-term channel. The pair is about to undertake braking through this level (1.1490 -1.1550) and we can expect higher volatility.

Recommendation

Support remains at 1.1310-1.1290 and key support down at 1.1118 area; Look for longs entries on pullbacks and correction.

USDJPY

In general

Higher yields of US bonds may support USD and on another hand, geopolitical risks related to North Korea are negative factors for Yen. Our view remains the same - 114.40 level was touched yesterday and 115.30 now seen as initial aim.

Technical

Yesterday USDJPY moved to correction after approaching 114.40 level, to run on the bullish channel's support but broke through it lower, the first FIBO correctional support is located at 113.15.

Technically, there is a way to talk about double bottom figure forming in USDJPY H4 that potentially targets 120 and higher.

Recommendation

Longs at 113.15 and lower

Crude Oil

In general

Oil is still vulnerable to decline and a drop to $44 level

Fundamental

Oil managed to get some support from OPEC conference in Istanbul amid statements about extensions of oil cut agreement. Besides API report showed a decrease in crude oil inventories by 8.1.

Technical

Brent returned above 47.10 and eliminated the risk of decline to $44.30. The closest support is located around 49 which will testify the power of oil upward momentum.

Recommendation

Out of the market unless level 49 is taken.  

This trading analysis is for informational purposes only and is not intended to be a strict recommendation for action or an offer for the purchase or sale of any currency, future or stock. Publishing the information we do not try or to attract any funds or deposits. We share our analytical view of current market situation and we don’t have any open position in instruments discussed and no plans to open any positions. Any person considering this research should carefully consider the risks associated with this and the level of trading experience

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