Forex Signals Brief April 6: All Traders Locked and Loaded for the NFP

Yesterday most of the day was pretty quiet, as the economic calendar was pretty light, with only the Swiss CPI inflation on the agenda during the European session. Inflation came below expectations in Switzerland, which gave the CHF another push lower, but at the end of the day it would make a total reversal and end up higher.

The last few hours of the trading day saw a significant shift in market sentiment driven by speculation surrounding potential retaliation from Iran against Israel. Despite the absence of concrete reasons for these fears, erroneous reports from Lebanese TV and the UK press fueled concerns about Iran’s response to the Israeli strike on its embassy in Syria.

This speculation led to a surge in safe havens such as the CHF and the JPY, as well as in Oil prices, with WTI crude climbing above $86, while stock markets began to sell off. Initially, the bond and foreign exchange markets were skeptical, but they gradually adjusted as the US dollar and yen attracted bids, reversing some of the significant losses. GOLD experienced volatility, reaching a new high of $2305 before retreating to $2280. Bitcoin initially rose 3%, but substantial selling pressure emerged in the final minutes, dampening the gains.

Today we have the big event taking place later on. The anticipated US Nonfarm Payrolls (NFP) data for March suggests an addition of 212K jobs, a slight decrease from the 275K jobs added in February. The unemployment rate is expected to remain steady at 3.9%. Year-over-year average hourly earnings are forecasted to be 4.1%, down from 4.3% in the previous year, while month-over-month earnings are expected to increase to 0.3% from 0.1%. Overall, market sentiment is positive regarding the upcoming data release, supported by robust Jobless Claims and the Present Situation Index. Additionally, employment components in the ISM Purchasing Managers’ Indexes (PMIs) are expected to reinforce this optimism. Federal Reserve Chair Powell has indicated that an unexpected downturn in the labor market may prompt a policy response. However, such a response would likely require the activation of the Sahm Rule, which stipulates that the unemployment rate must rise to 4.4% before initiating policy adjustments.

he upcoming Canadian Labour Market report for March is expected to show an addition of 25,000 jobs, a decrease from the 40,700 jobs added in February. The unemployment rate is forecasted to move up slightly to 5.9% from the previous rate of 5.8%. Market attention will be particularly focused on wage growth statistics, as this is a key concern for the Bank of Canada. Wage growth trends provide important insights into inflationary pressures and overall economic health. Therefore, any significant deviations from expectations in wage growth figures could influence market sentiment and potentially impact monetary policy decisions by the central bank.

Yesterday the volatility was lower throughout the day but increased all of a sudden after the Middle East news in the evening, sending safe havens surging, while risk assets tumbled lower. We we up with two winning forex signals for the day until the crash in USD/JPY and USD/CHF came, where we were long, so we got two losing signals at the end.

Gold has experienced a significant surge recently, surpassing the $2,300 threshold, with a target price of $2,500 within reach. This notable rally underscores the resilience of gold buyers, who are prepared to step in and bolster the market during periods of decline, highlighting the underlying optimism in the gold market. Yesterday, gold prices reached a fresh high of $2,280, further bolstering the bullish momentum in the gold market and reaffirming the precious metal’s status as a sought-after safe-haven asset and hedge against economic instability.

The EUR/GBP currency pair has remained range-bound, fluctuating within a narrow band of 0.65 to 0.66. This consolidation pattern has persisted amid influence from both the Bank of England (BOE) and the European Central Bank (ECB). However, recent data releases from the Eurozone, particularly from Germany, have provided some encouraging signs, contributing to a bullish sentiment surrounding this forex pair this week. As the pair approaches the upper boundary of the range, attention will be on whether buyers can successfully propel it above the 0.66 level.

The struggle to sustain Bitcoin’s price above $70,000 might signify a potential near-term peak for the cryptocurrency. This threshold serves as a critical resistance level, suggesting a waning bullish momentum. If buyers fail to maintain prices above this mark, it could signal a decrease in demand and a shift in market sentiment. Additionally, the presence of a bearish reversal pattern on the daily chart supports the notion of a possible price reversal. Such patterns often indicate a transition from bullish to bearish sentiment, typically preceding further price declines. However, the price managed to hold above $65,000 when we opened a buy BTC signal and closed it yesterday as the price bounced off the 50 SMA.

ETHEREUM has demonstrated strong support at the 50-period Simple Moving Average (SMA), highlighting the significance of this technical level in predicting price movements. The rebound from this level suggests that buyers are keen to enter the market and uphold Ethereum’s price as it nears the 50-period SMA. However, Ethereum has encountered resistance near the 20-period SMA, hindering further upward movement. The fact that the 20-period SMA is acting as resistance implies the presence of selling pressure or insufficient bullish momentum to drive Ethereum’s price beyond this level. Moreover, a negative reversal occurred on Tuesday, pushing the price towards $3,000 but the decline stopped above the lows from March.