Forex today: Daily analysis

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468

What moves the market on May 8?

08.05.2020

Yesterday we got a poor data from the USA. There were 3.2 million new jobless claims, less than on the prior week, but more than analysts anticipated. That means, in total, it’s already 33.5 million people lost their jobs during the coronavirus. That’s terrible.

So, today we are waiting for non-farm payrolls at 15.30 MT time. It’s expected the worst ever. That means, Japanese Yen and Swiss Franc can gain against the US dollar today. However, if numbers are in line with expectations –USD could rally. The best you can do is to sell ahead of the report and close before or wait for the numbers to be released, prices to stabilize and see what becomes the real move of the day.

Now EUR/USD gains ahead of critical Non-Farm Payrolls. It recovered from 1.0765 yesterday and rose above 1.0800. There are several resistance levels on the H4. The pair has to rise above 1.0885 to get a chance to rise to 1.0965. Support is at 1.0775.

And now, for the good news, countries made first steps to reopen their economies, based on that, risky assets will continue to recover. The Australian and New Zealand dollars went up because of the encouraging Australian and Chinese trade data.

The pound also climbed. The Bank of England left its bond purchase program and interest rates unchanged, but they are ready to ease further. GBP/USD needs to rise above 1.24 for bulls to regain power.

S&P 500 futures hit their session highs after reports that China and the US had a phone call on trade. The yuan moved up.

Elsewhere, oil is benefiting from the improvement in the risk appetite. Yesterday the were wild price swings as investors weighed supply-and-demand fundamentals against Saudi Arabia’s global price hike.

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What do you need to know on May 12?

12.05.2020

Main movements on the market: risk-off mood strengthened USD, AUD dropped on China’s imports’ ban and Saudi Arabia cut oil production.
USD and stocks ahead of fear of the second wave

Today the market sentiment is quite risk-averse. There are some fears of the second wave of coronavirus infections. On the one hand, it’s awesome for the US dollar and the Japanese yen. On the other hand, it’s terrible for stocks, but not for all of them, the Nasdaq stock gained as biotech is in high need these days. Goldman Sachs expected that S&P 500 can contract by almost 20% in the next three months.
AUD fell under pressure of Chinese import ban

The Australian dollar went down after China had stopped imports of meat from four Australian producers, perhaps, it was the response to the Australian calls the COVID-19 outbreak inquiry.

AUD/USD has been moving up since March 23, but it seemed it takes a pause now. If it breaks through the resistant line at 0.653, it will continue increasing up to 0.667. However, if it crosses the support level at 0.64 it can fall further to the next support at 0.628.

Saudi Arabia announced cut of oil production

Oil stabilized after Saudi Arabia claimed it would reduce output. Saudi Arabia made a decision that it would further slash production, going beyond the OPEC+ agreement. Moreover, there are first signs of recovery of oil demand, that is also beneficial for the oil upper price.

The WTI oil price is slightly above the 50-day moving average. If it is strong enough to break through the 26.00 mark, it will open doors towards the next resistant line at 29. Support is 20.00.

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Retail data for the US: down again?

13.05.2020

The US will publish headline and core retail sales at 15:30 MT time on May 15.

Instruments to trade: EUR/USD, USD/JPY, USD/CHF

While the headline retail sales show the total value, the core indicator excludes sales of automobiles due to their volatility. Based on their data, we may judge the economic activity of a country and the level of consumer spending. During the previous release, both indicators fell significantly. The headline one declined by -8.7% (vs. -8% expected). The core indicator surprised traders positively, though, if we may call it “positive”. The indicator fell by “just” -4.5% (vs. the forecast of -4.9%). The pandemic hit US retailers hard as well as the US dollar. The greenback fell to the red zone on the release.Will we see a different outcome this time? There is a little chance that we do, but if that happens the US dollar will be a winner. Remember the simple rules:

• if the actual levels of indicators are higher than the forecasts, the USD will rise;

• if the actual levels of indicators are worse than the forecasts, the USD will fall.

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News digest on May 14

14.05.2020

The market continues to be in a risk-off mode. Time to gain on falling!
AUD dropped on poor unemployment data

Almost 600,000 jobs were lost in April in Australia. Numbers were worse than analysts anticipated. As a result, AUD sank after its strong rally. Let’s look at the daily AUD/USD chart. The price has hit the 100-day moving average already twice. There is a still strong upward trend. However, no way AUD can break out this level soon in such a risk-averse market. If it manages to do it though, it will open doors towards 0.6635. Support are at 0.6375 and 0.626.

Trump disagrees with Powell on negative rates

The US president wants rates to go below zero, but Jerome Powell, the Fed chairman, doesn’t even consider this tool. Yesterday Powell claimed that outlook is dire and there are downside risks ahead. He thinks extra government spending will prevent the country from the long-term recession. The Fed also began buying exchange-traded funds to supply more money to the market and discussed additional aids. USD surged as well as JPY.
Stocks are overvalued

Stanley Druckenmiller, a billionaire investor, said that he didn’t remember the time when the risk of holding stocks so outweighed the potential profit. According to him, the market is flooded with liquidity and soon it will contract. Donald Trump, as always, impressed everybody with his straightforwardness.

However, Wall Street analysts don’t think the same. The S&P 500 has dipped this week, and economists expect the further downturn. Most analysts believe the market will be bearish this year.
Oil trades higher

The WTI oil price increased to $25 a barrel. Overall, it’s going up in May. It was caused by the drop in U.S. crude inventories, marking the first decline since January. However, analysts warn that oil prices could go negative again ahead of June contacts expiration.

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Main market drivers on May 15

15.05.2020

All eyes on the US-China relationship that set the market mood. How is it today?
Chinese industrial output upbeats expectations

The day has started with an encouraging Chinese report. Industrial production increased by 3.9% that signalized a strong recovery in supply. However, the country still struggles with a weak demand: retail sales decreased by 7.5% and fixed asset investment contracted by 10.%. Investors are looking closely at China as it was the ‘first out’ economy from COVID-19. That’s why they can roughly predict the pace of a future recovery of other countries. The Chinese data reveals only little and gradual improvements in economic activity. Moreover, it has proved that the government stimulus really works.
Tense US-China relationship

The worsening US-China relationship outweighed the mixed Chinese data. Donald Trump doesn’t have any intentions to improve the tough situation. He said that he could cut ties with China, it was the day after the US federal pension fund delayed investment in Chinese shares. That’s why the Chinese yuan didn’t react to the improvement in industrial output. If the price reaches 7.11, it can possibly fall further to 7.1. Resistance levels are at 7.129 and 7.149.

Oil is heading for a third weekly gain

Despite the market uncertainty, the crude oil market has been slowly rebalancing as major producers cut supply. Also, economies started to reopen and, as result, demand has been gradually increasing. Elsewhere, Saudi Aramco decreased its sales to key buyers that also pushed the oil price higher. Nevertheless, oil is still down more than 50% this year. The way of recovery seems to be long and slowly.

Let’s look at the WTI oil chart. The price has been strongly ramping up since the end of April. It reached the recent April high at 28. The next barrier to the way up will be at 35. Support levels are at 23 and 20.

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What moves the market on May 18?

18.05.2020

The day started with the poor data from Japan. The country officially fell into a recession, that’s likely to deepen further as consumers limit their spending, companies cut back on investment, production and hiring stay at low levels amid the coronavirus.

As we can see, USD/JPY didn’t react so much, it slightly moved up after the report. We shouldn’t forget that the Japanese yen is a safe haven, as well as USD. That’s why it’s hard to tell which way the USD/JPY will go this week as investors use both currencies for a safe-haven protection.

Let’s look at the chart. If the USD/JPY increases and crosses the resistance line at 107.45, it will open doors further to the next one at 107.7. Support levels are at 106.9 and 106.6.

Even so, futures on the S&P 500 climbed. It’s strange in such a risk-off market. This disconnect between economic reality and the stock markets could be associated with the comments by the Fed’s Chairman Jerome Powell that the central bank hasn’t run out of ammunition yet and could do more if required. However, he also said that the stock rally could decline significantly if there were some setbacks in the fight to contain the virus. Another reason of stocks’ fall could be the deterioration of the US-China relationship.

Moreover, the WTI oil price went above $30 a barrel! For the first time in two months! As producers continued to cut production, helping to rebalance a market. Together with a tentative recovery in demand, that’s made a repeat of last month’s plunge below zero extremely unlikely before the expiration of the WTI June contract on Tuesday. There’s still a risk, however, that oil’s recovery could be derailed if the pandemic worsens. However, prices are unlikely to drop below $20 a barrel.

Resistance is 35. Support levels are 23, 20 and 13.

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Market outlook on May 19

19.05.2020

How did Merkel push EUR up? What company will first make a vaccine? How long will oil rise? You’ll find all answers in the article!
Angela Merkel switched sides

Germany and France made a deal to fund $546 billion to support members of the European Union, that’ve been hit hardest amid the coronavirus. It was a surprise as only recently Germany made a decision that the EU’s mass bond-buying violates the German constitution. It was a clear message that Germany doesn’t want to spend more money to support poor EU members. And now, Angela Merkel breaks the German taboo and lend money to the EU. Why? Is it the fight for the European idea? Anyway, everyone seems happy now except Austria, Netherlands and Denmark. As a result, EUR climbed on optimistic news.

Let’s look at some technical levels. If the price crosses the resistance line at 1.098, it can go even higher and reach 1.114. Otherwise, it goes down to the support line at 1.084, and after it may dip down to 1.0775.

Moderna Inc’s can save the world

The American biotech company Moderna revealed positive results on testing. The small group of volunteers managed to produce protective antibodies, what is definitely a good sign. Let’s wait for future tests and fingers crossed! Yesterday the stock jumped and almost reached $86. However, today it’s moving down.
Oil prices continue growing up

The vaccine optimism turned the market into the risk-on mode. The oil price formed a steady upward trend. It’s a result of a reduced supply and a boosted demand. The WTI price is headed to $35 a barrel. Support are at 23 and 20.

Stocks gain

An overall positive mood pushed the stocks indexes up. Just look at it! On Wall Street overnight, the S&P 500 gained 3.15%. The Dow Jones Industrial Average rose 3.85% and the Nasdaq Composite added 2.44%. Very promising!

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Will the Flash Manufacturing PMI support the EUR?

20.05.2020

Euro Area Flash Manufacturing PMI will be released on Friday at 11:00 MT time.

Instruments to trade: EUR/USD, EUR/AUD, EUR/GBP, EUR/JPY

Similar to the same indicator in the UK, the Eurozone Manufacturing PMI’s drop in April was the steepest since its inception in 1997. From 44.5 in March it plunged to 33.4 in the next month. May’s Manufacturing PMI should be in the same spectrum noting the complicated state the European economy is in. Some countries still are experiencing local peaks of infection rates, others are struggling to keep the risk of the second wave of the virus at bay while the gradual economic reopening takes place. Therefore, it would be reasonable to expect the May Flash Manufacturing PMI in Europe to be comparably weak as in April. However, if it happens to positively surprise the market, the EUR will grow in value.

If the figure is better-than-thought, the EUR will rise.
Otherwise, the EUR will fall.

Check the economic calendar

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Main market drivers on May 21

21.05.2020

Let’s start with the stock market. The US-China relationship got worse and set a risk-off market sentiment. The US Senate claimed that it could bar Chinese companies from listing on American exchanges. While President Donald Trump tweeted criticism of China’s handling of the coronavirus outbreak. Everybody took it really seriously. As you can see on the chart S&P 500 has a strong upward trend, but after the swing up yesterday, it hit a 100-day moving average and contracted today. Support levels are at 2815 and 2705. However, if it breaks through the retracement at 2975, it will go up to 3000 and then 3110.

Let’s move on to the oil. May has brought some relief to the oil market. The worst of the demand drop seems to be over. The WTI oil price ticked up to $34 a barrel, while Brent crude rose to $36. Governments are easing lockdowns, and that’s boosting consumption. At the same time, Saudi Arabia, Russia and other OPEC members have started unprecedented oil production cuts, easing the massive oversupply. We haven’t seen such high prices since March 10. If it breaks through the resistance at 35, it may go even further to 37. Support levels are at 27 and 23.

And finally let’s talk about gold. The gold trades at high rates these days. We hadn’t seen any growth yesterday. The price was spiking high, but closed negative. That’s why we could assume that the price will move down in the short term, but the long term remains bullish. It could have a pullback to 1715 or even 1685 and then jump again.

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What moves the market on May 22?

22.05.2020
China held out its hand to the US. Will the USA shake it?

The US-China relationship is the focus of attention these days. China pledged to implement the first phase of its trade deal with the US. According to Chinese Premier, “China will continue to boost economic and trade cooperation with other countries to deliver mutual benefits.” On January 15 two sides signed a phase-one trade pact, but the agreement has come under threat as Donald Trump blamed China for the coronavirus outbreak. According to him, he had “a very hard time with China” and he would “save $500 billion” if it cut off ties with China. Also, China for the first time since 1990 hadn’t set its GDP target. All this raised market uncertainty, S&P 500 fell deeper. Let’s look at the chart. The price had been rising since May 14, but it struggled to cross the retracement level at 2975. Now it’s headed down to the support level at 2895. It may be a good entry point to go short as if it breaks through it, the price will dip down to 2815.

JPY benefits from US-China tensions

As we know, both USD and JPY are safe-haven currencies. However, now the Japanese yen has an advantage as it stays outside US-China disputes. Also, today the Bank of Japan released a new lending program to support small businesses. That all played into Japan’s hands, the price of USD/JPY plummeted. Now the price is struggling to cross the 200-period moving average, which it has hit recently. If it breaks through it, it will fell down to 107.1. In other case, it may reach the retracement level at 107.725, that will open doors towards 107.9.

Oil is moving down

The risk-off sentiment on the market pushed the oil prices down. Victor Shum, vice president of energy consulting at IHS Markit in Singapore, said “the nascent demand recovery is still vulnerable, and the drop in prices today is an injection of reality”. Yesterday the WTI oil price had reached unseen highs since March 10. However, it bounced back today. Support levels are 27 and 23. Retracement is 35.

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What moves the market on May 25?

25.05.2020

Investors are confused. They weigh the prospect of a soon recovery as economies are reopening against the growing US-China tension. Also, analysts anticipate the whole trading to be discreet with US and British markets closed for public holidays.
Stocks gain

The risk-on mood still had a positive impact on stock indexes, such as S&P 500, Nasdaq and Dow Jones. S&P 500 has gained and approached the retracement level at 2975. If it crosses it, it will open doors toward the psychological mark at 3000. Support is at 2895.

Risk-on currencies are under pressure

Whereas, optimism around economic reopening is fading because of the lack of transparency in US-China relationships. Beijing decided to put security laws on Hong Kong, what was viewed negatively by the USA. Investors prefer safe-haven currencies to risk-on ones. AUD, NZD and GBP are moving down under pressure. Let’s look more closely at AUD/USD. It had been a strong upward trend since March 20. Nevertheless, the price has started falling on May 21. It’s may be just a correction. After the pullback to the support line at 0.649, it can move up again. Retracement is at 0.66. Support levels are at 0.649, 0.64 and 0.627.

USD vs JPY

The Japan’s government is expected to lift the state of emergency in Tokyo and its surrounding regions. The US dollar remains the most preferable currency among other safe-haven ones. It has even unbeaten the Japanese yen. USD/JPY has almost broken through the retracement level at 107.725. The next one is at 107.9. Support lines are at 107.35 and 107.1.

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Market news on May 26: S&P 500 passed 3000

26.05.2020

Let’s look at main movements on the market today on May 26.
S&P 500 surged

First of all, S&P 500 passed the 3000 mark! The market sentiment is really risk-on today. It’s mainly based on recovery dynamics and potential drug developments. S&P 500 is headed to the next retracement level at 3110. Support levels are at 2960 and 2815.

GBP is moving up

Nevertheless, tensions between Washington and Beijing remain in focus as the USA added 33 Chinese entities to a trade blacklist without warning. It’s better to keep an eye on future developments in their relationship.

But, US-China disputes fail to weigh on risks as Donald Trump hasn’t yet pronounced the last word on the Hong Kong issue. The UK Prime Minister Boris Johnson announced the opening of all non-essential shops from June 15. All this played well for the British pound. It has just crossed the retracement level at 1.2265. Now it’s heading to 1.2315. Support levels are 1.22 and 1.216. However, analysts have bearish scenarios for pound in the long-term. Reasons are the end-June deadline to extend the Brexit transition period and the possibility of negative interest rates in the UK.

Oil demand is recovering

Let’s move on to the oil market. The WTI price approaches the retracement level at 35. The head of the International Energy Agency forecasted that the oil market will recover even before the global pandemic. According to him, the oil demand will rebound to its pre-crisis level in the absence of strong government policies, a sustained economic recovery and low oil prices. If the price breaks through 35, it will go further to 37.5. Support levels are 27 and 23.

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Trade ideas on May 29

29.05.2020

Let’s look at main movements on the market.
USD/JPY fell down

Investors are waiting for Donald Trump’s response to China’s security law in Hong Kong. As a result, the market uncertainty pushed up the Japanese yen. The USD/JPY is headed down to the support line at 107.1. If the price manages to cross it, it will pave the way towards the next support level at 106.8. Resistance levels are at 107.45 and 107.725.

Stocks dipped on risk-off sentiment

S&P 500, Dow Jones, Nasdaq dipped today. Today the focus of investors has shifted from optimistic prospect of reopening economies to the US-China tensions. China’s parliament on Thursday insisted on the new security legislation in Hong Kong that raised a lot of questions about its future freedom and economic functioning. Everybody’s waiting for the US reaction today. Inevitably, the US-China relationship will get worse. Just yesterday S&P 500 passed the 3060 mark, unseen since March. Support levels are at 3000 and 2960.

Gold is moving up

The gold price rose on the market uncertainty and falling USD. It’s headed up to the retracement level at 1730. If it breaks through it, it will possibly jump up to 1750. Support levels are 1700 and 1680. Most analysts have bullish forecasts for gold as it always sticks to the long-term trend.

AUD/USD surged on weak USD

The Australian dollar went up as the US dollar fell. AUD has been climbing since March 20. Today it has met with a 200-day moving average at 0.6665. If it breaks through it, it will go up to the next resistance level at 0.675. Support lines are 0.66 and 0.65.

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How US protests affect market?

01.06.2020

The main source of volatility for global markets is US-China tensions. Investors were waiting for US President’s speech on Friday for some hints. But, Donald Trump was not so disruptive as everybody expected. He didn’t impose any direct sanctions on China for its treatment of Hong Kong. According to investors, the US impact on China and Hong Kong is likely to be limited and more symbolic while the financial sector is unlikely to be affected.
Stocks gained

That improved the market sentiment and pushed stocks up. Let’s look at S&P 500. It has been climbing since March 20. It has already passed the 3040 mark. If it breaks through the retracement level at 3070, it will make the way towards 3110. Support levels are 3000 and 2935.

EUR surged

Nevertheless, violent protests in some American cities bothered investors, as crowds increase chances for the second coronavirus wave and economic activity loss.

As a result, EUR/USD rose on the weak greenback. Moreover, investors highly expect the ECB to unveil the rescue program with an additional 500 billion euros of asset purchases. All that played well for the EUR.

The price reached the March high at 1.114. The next retracement is at 1.117. If it manages to break through it, it may go even higher to 1.121. Support levels are at 1.11 and 1.10.

Gold moved up

The gold has passed 1740 and it’s moving up to a recent high at 1750. The overall trend is bullish, as you can see. And, the gold is likely to stick to the trend. Support levels are 1730 and 1700.

Oil forecast

Let’s talk about oil a little bit. Crude surged a record 88% in May driven by the OPEC+ deal. What’s more, OPEC+ is likely to expand its supply cuts in next months. However, prices are still well below where they have been at the beginning of the year. That’s because the demand yet need to show a sustained improvement for oil to keep rallying. Thanks to China, its oil demand has risen to near pre-coronavirus levels. However, the US demand stays low because of violent protests in the USA. Lrt’s look at WTI oil chart. If the price crosses the 100-day moving average, it may go further to 37.5. Support are 31.5 and 27.

To trade WTI with FBS you need to choose WTI-20N.

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What to trade on June 2?

02.06.2020

AUD surged

The day started with a fresh data from Australia. The Reserve Bank of Australia set a cash rate unchanged. Also, RBA’s governor Philip Lowe was quite optimistic about the future economic recovery. He said: “it is possible that the depth of the downturn will be less than earlier expected”. He noticed that restrictions had been eased and rate of infections reduced. The market sentiment immediately improved and pushed AUD up. We can see on the AUD/USD that it rebounded to its pre-crisis levels. The price broke through all moving averages. Now it’s headed towards the retracement level at 0.69. The next one will be at 0.7. Support levels are 0.675 and 0.665.

Oil prices stabilized at $35

The oil prices are flat as markets wait for the OPEC+ decision. Russia and Saudi Arabia can agree to extend supply cuts in next three months. It will allow WTI oil prices to rebound to $40 a barrel at least. Petrol consumption is recovering, but it still well below pre-coronavirus levels. Speaking about airplanes, it’s hard to say when the industry will come back to normal. The WTI oil price slightly crossed the 100-day moving average and it’s headed to the new high at 37.5. Support levels are 31.5 and 27.

Violent protests in the USA

Violent protests in the USA have made the US dollar really weak. Investors start doubting about the future US recovery. The US economy hasn’t yet recovered from the coronavirus damage, when it met the new challenge. Donald Trump said that he would deploy the military troops if states don’t take measures. That led to S&P 500 contraction for a while. However, stocks are still trading at high levels as most economies are reopening.
Tesla jumped

On Saturday, SpaceX, founded and led by Elon Musk, sent two NASA astronauts to the International Space Station. The launch was successful and gave more confidence to investors in Musk and in Tesla. Let’s look at the chart, the price reached pre-crisis positions. The key psychological mark at 900 is really close. Support levels are 805 and 765.

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How will USD react to NFP amid coronavirus?

03.06.2020

The US NFP will be reported on Friday, June 5, at 15:30 MT time.

Instruments to trade: EUR/USD, USD/JPY, GBP/USD

NFP is the essential indicator that depicts the US economic health. It is released shortly after the month ends. It’s a must-see for every trader as most times it has a huge impact on the market. There is a general rule that USD will rise, if NFP is better than expected. Nevertheless, the coronavirus reality breaks all rules. The market doesn’t react now as most expect it. The reason is USD has a safe-haven title and it goes up, when the market sentiment is risk-off. Last time on May 8, non-farm payrolls were better than forecasted, USD movements were mixed as firstly the greenback dropped on a risk-on sentiment after the report, but then climbed the next day. Anyway, the report is more likely to bring fresh volatility in the market and create great trading opportunities.

Catch the impulse after the report and join the market movement.

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Risk-on sentiment eased on June 4

04.06.2020

The market takes a breath after the rally up. What is next?
Stocks have a pause

S&P 500 passed the 3100 mark, unseen level since March. The reopening of economies and stimulus packages across the world improved the market sentiment. Investors believe that the worst is over. And, according to Bloomberg, we’ll see more support for the stock market.

Moreover, the US ADP private payrolls were much less than analysts expected. The data showed that only 2.76 million lost jobs, when 9 million were anticipated. That’s still a poor data, but it’s a sign that the economy is moving in the right direction. Today traders will wait for the US unemployment claims at 15:30 MT time.

Let’s look at the S&P 500 chart. Yesterday it showed the best 50-day trading stretch. If the price advances further, it may ramp up to the March 3 high at 3250. Support levels are 3000 and 2935.

OPEC+ meeting in doubt

Oil closed at the highest level since March: WTI - $37 and Brent - $40. However, today prices slightly contracted. Most investors are in a wait-and-see mode ahead of the OPEC+ meeting. The question is for how long the oil alliance will cut supply. If they agree to extend cuts till the end of the year, it will definitely push prices up. Look at the Brent oil chart below. The price is exactly under the 100-day moving average. If it breaks through it, it will surge up to $45. Support levels are $36 and $34.

To trade Brent with FBS you need to choose BRN-20N.
Gold dropped under risk-on

XAU/USD couldn’t find any demand in such a risk-on atmosphere. The price fell down to the support level at 1700. The next support is at 1680. Resistance levels are 1730 and 1750. Gold set a really bullish trend. And, it’s unlikely that it will reverse soon. It looks more like a short term contraction. Tomorrow NFP at 15:30 MT time should add some volatility to the market. Be ready!

ECB statement today

The European Central Bank will have a meeting today at 14:45 MT time and then later hold a press conference at 15:30 MT time. Click here to know how to trade EUR after the ECB statement.

Check the economic calendar

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NFP forecasts from 10 major banks

05.06.2020

Today is the big day! Investors are waiting for NFP at 15:30 MT time. NFP shows the change in the number of employed people during the previous month, excluding the farming industry. Today it will reveal the employment change in May. It’s one of the most important indicators for all traders as it causes strong market movements. Here below you’ll find predictions from 10 major banks. Their forecasts vary from -2.2 million to -10 million. The most common one is -8 million.

RBC Economics

RBC Economics provides economic analysis and forecasts to the largest bank in Canada - the Royal Bank of Canada and its clients. They anticipate a 2.2 million decline in payrolls after April’s 20.5 million drop and a further increase in the unemployment rate to 20%.

Wells Fargo

It’s the world’s fourth-largest bank, located in San Francisco. Wells Fargo’s analysts believe non-farm payrolls will drop by 8 million and the unemployment rate will climb to 20%.

NBF

NBF is abbreviation for the National Bank of Fujairah in the United Arab Emirates. They expect the US employment to drop by 7.5 million.

CIBC

The Canadian Imperial Bank of Commerce, commonly referred to as CIBC, is one of the “Big Five” banks in Canada. CIBC analysts suggest that around 6 million jobs were shed in May and the unemployment rate will rise by 18.6%.

ING

The ING Group is a Dutch banking and financial services corporation headquartered in Amsterdam. The expect the huge 10 million drop in non-farm payrolls and a rise in unemployment to 20%.

Westpac

Westpac is the Australia’s first bank, located in Sydney. Its economists predict a 7.5 million decline in employment in May and the unemployment rate to peak at 20%.

Deutsche Bank

Deutsche Bank is a multinational investment bank and financial services company headquartered in Frankfurt, Germany. Its analysts forecast a 6.1 million drop in nonfarm payrolls, with the unemployment rate rising to 19.1%.

Danske Bank

Headquartered in Copenhagen, it is the largest bank in Denmark and a major retail bank in the northern European. Danske Bank’s analysts think that employment in the USA has dropped by 10 million. However, they mentioned that we may be too pessimistic.

TDS

TD Securities is a reliable Canadian investment bank. According to economists at TD Securities, the -8 million consensus for payrolls is too weak. Their forecast is -3 million. The TDS expects less weakness than consensus in the unemployment rate as well: a 2.8% rise to 17.5%, versus 19.5% for the consensus.

Goldman Sachs

It’s an American multinational investment bank, headquartered in New York City. Analysts at Goldman Sachs expect a 7.25 million drop in payrolls and a jump to 21.5% in the unemployment rate.

Follow the NFP report at 15:30 MT time today and catch the market movement!

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Market movers on June 8

08.06.2020

Oil prices surged after successful OPEC+ meeting

OPEC+ members have signed a significant deal to cut the oil supply by 9.6 million barrels a day next month. In addition, any country that failed to fully implement output cuts should compensate it during next months. Also, keep in mind that countries a reopening and demand is recovering. That all played well for oil prices: WTI oil opened today at $40 a barrel and Brent oil – at $43. It’s the highest level for over three months! Here below you can see how U.S. Energy Secretary Dan Brouillette welcomed the deal on Saturday.

Let’s look at the Brent oil chart. It’s headed towards 50% Fibonacci retracement level at $45. And, this price is likely to be reached soon. The next retracement level will be at $51.5. Support levels are $39 and $36.

S&P 500 is aggressively climbing up

First of all, look at the chart. You’ll see really great performance of S&P 500. The price has passed $3190. If it crosses the retracement level at $3250, it will clear the way up towards $3335. Support levels are 3110 and 3000. What is the reason of such a fast growth? The reason should be the optimistic market sentiment as economies are reopening.

Gold is recovering its losses

The recent drop of the shining metal seems to be in the process of restoration: XAU/USD is one step away from testing $1,700. Noting the cloudy status of the US-China relations, we are likely to see that cross upwards pretty soon.

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FOMC statement on June 10

09.06.2020

Instruments to trade: EUR/USD, USD/JPY, USD/CHF

On June 10 at 9:00 MT time the Fed will report updated economic and financial guidelines — the first ones since last December. Also, later at 9:30 MT time the FOMC will held the press conference. There are no doubts that rates won’t go below zero as the US economy has a real potential of a V-shaped recovery as S&P 500 has almost reached the pre-crisis level. Some analysts consider that may be it’s time to even increase rates as the NFP data was encouraging. The May jobs report showed that only 2.5 million people lost jobs, while economists anticipated 8 million. Also, the unemployment rate turned out 13%, when the forecast was 20%. It was a breath of a fresh air after a long time of the negative market sentiment.
How the Fed will react to all this?

Despite a positive May jobs report, it’s highly expected that the Fed won’t change the interest rate policy and will continue stimulating the economy. According to Sam Bullard, senior economist at Wells Fargo, rates will remain near zero until the end of 2021.

Some analysts wonder that the Fed may stop its quantitative easing program on the positive tone as the economy is improving. While others think that authorities will leave its policy unchanged and wait for better indicators “until the economy has weathered recent events and is on track to achieve maximum employment and price stability”. Their quantitative easing has been reduced significantly with just $4 billion dollars per day of Treasury purchases scheduled for the coming week versus 75 billion dollars at the peak of the crisis. The Fed is likely to continue the purchases in the amounts that would be needed. On the economic outlook, most strategists think the Fed will once again focus on the severity of the situation and downgrade risks, but also may mention that the economic activity is bottoming out.

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