Weekly forex data: markets look ahead to the NFP

The golden cross of the 50 SMA over the 100 a fortnight ago came ahead of more gains, although price has now moved clearly into overbought based on the slow stochastic (15, 5, 5). The weekly Fibonacci fan has probably lost relevance now that the medium-term trend is clearly upward, but 61.8% might still limit a fairly deep retracement.

An obvious target for the bulls here would be January 6th’s high just below $1,960. However, gold probably has more room to fall than gain in the immediate future. Another negative NFP is of course possible, but buying in with the stochastic around 90 and momentum seeming to drop is a significant risk.

Key data this week

Bold indicates the most important release for this symbol.

Tuesday 1 June

• 45 GMT: Markit manufacturing PMI (final, May) – consensus 61.5, previous 60.5

Wednesday 2 June

• 15 GMT: ADP employment change (May) – consensus 650,000, previous 742,000

Friday 4 June

• 30 GMT: non-farm payrolls (May) – consensus 650,000, previous 266,000
• 30 GMT: American unemployment rate (May) – consensus 5.9%, previous 6.1%

Brent, daily

Sentiment generally remains positive on crude ahead of OPEC+’s meeting tomorrow. The outlook for demand is still relatively positive considering the circumstances but the cartel and its allies are likely to maintain the current cuts to production. The wildcard in terms of events for crude is a possible breakthrough in American-Iranian negotiations: loosening of sanctions could see Iran add an extra two million barrels per day to total supply.

remains a very strong psychological resistance, but it’s possible that tomorrow’s meeting could boost sentiment and lead to a breakout upward. Intraday losses in the event of a negative reaction might be capped by the 50 SMA around $66.10.

Apart from OPEC+ and the NFP, this week’s regular stock data from the API and EIA might drive volatility for oil. Equally, another gain in Baker Hughes’ rig count might dent sentiment on Friday night.

Key data this week

Bold indicates the most important releases for this symbol.

Tuesday 1 June

• all day: 17th OPEC and non-OPEC Ministerial Meeting
• 45 GMT: Markit manufacturing PMI (final, May) – consensus 61.5, previous 60.5

Wednesday 2 June

• 30 GMT: API crude oil stock change (28 May) – previous negative 438,000

Thursday 3 June

• 00 GMT: EIA crude oil stock change (28 May) – previous 1.66 million

Friday 4 June

• 30 GMT: non-farm payrolls (May) – consensus 650,000, previous 266,000
• 00 GMT: Baker Hughes oil rig count (4 June) – previous 359

Pound-rand, daily

South Africa’s intensification of restrictive measures against transmission of covid-19 starting today haven’t had a clear impact on the rand yet. Despite the generally better picture for the British economy and voices from the Bank of England predicting earlier rate hikes than expected next year, South Africa’s role as an exporter of in-demand commodities seems to be taking traders’ attention for this symbol: South African balance of trade earlier today at over R51 billion beat the consensus by more than R20 billion.

The 61.8% weekly Fibonacci retracement area is an important support which is still being tested. Most of the time, second and third tests are less likely to succeed, so it’s possible that a bounce might be observed over the next few days barring major good news from South African data. R20 would be a key psychological zone if this happened, while to the downside R19 might be an important support based on 20 December 2020’s low.

Key data this week

Bold indicates the most important release for this symbol.

Tuesday 1 June

• 30 GMT: Markit/CIPS manufacturing PMI (final, May) – consensus 66.1, previous 60.9
• 30 GMT: South African unemployment rate (Q1) – consensus 33.5%, previous 32.5%
• 30 GMT: South African unemployed persons (Q1) – consensus 7.3 million, previous 7.2 million
• 30 GMT: ABSA manufacturing PMI (May) – consensus 58, previous 56.2

Wednesday 2 June

• 30 GMT: SACCI business confidence (April) – consensus 96, previous 94