MCK Daily Financial Markets Analysis 09.09.2024

TITLE:? Canada’s unemployment rate rises to 6.60% and weak employment, US higher NFP release and lower Jobless rate at 4.20%, US Stocks, Gold and Crude drop, USD strengthened.

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PREVIOUS DAY REVIEW: IMPORTANT EVENTS (06.09.2024)

U.S. employment increased less than expected in August, but the jobless rate dropped to 4.2% suggesting the labour market conditions are not that bad. The closely watched employment report from the Labor Department on Friday also showed solid wage growth last month.

The U.S. central bank seems ready to start cutting rates at its policy meeting in about two weeks. Higher borrowing costs are curbing overall demand in the economy.

"The labor market is cooling at a measured pace," said Jeffrey Roach, chief economist at LPL Financial. "Businesses are still adding to payrolls but not as indiscriminately. The Fed will likely cut by 25 basis points and reserve the right to be more aggressive in the last two meetings of the year."

Source: https://ca.finance.yahoo.com/news/us-weekly-jobless-claims-decline-124151623.html

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WINNERS VS LOSERS?

Popular Assets Moves

The week starts with USDJPY to the top gaining 0.45% so far. The USD appreciated much since Friday and continues to strengthen today. In addition, the JPY has been weakening as well early during the Asian session.

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NEWS AND ECONOMIC DATA MONITORING?

Previous Trading Day: Review Analysis (06.09.2024)

Time zone EEST (GMT+3:00) Athens

Midnight > Night Session (Asian)

No important announcements, no special scheduled releases.

Morning > Day Session (European and N. American Session)

Labour data for Canada came out weak! Unemployment rate rose to 6.60% while the employment change was reported lower than expected, at 22.1K. In the US average earnings data showed an increase while the NF employment change was reported lower than expected at 142K versus the forecast of 164K. The unemployment rate weakened though as expected to 4.20%. Kind of mixed data but still weak. The news caused a shock that at the time of the release there was no clear direction. Soon after the USD appreciated greatly while the CAD, after an initial appreciation it eventually weakened. The USDCAD moved to the upside eventually after the news, around 90 pips, as the highest before closing.??

GENERAL IMPACT

FOREX

US Dollar Index 15m Chart - News Impact

The US Dollar index moved sideways around the MA with low volatility until the NFP report release. The labour market figures were reported weaker than expected but better than the previous record. The market initially reacted with an up-down shock and then the USD started to gain strength until the US dollar index reached the resistance near 101.41 with a retracement to take place soon after. Volatility levels lowered with the index forming a triangle as depicted on the chart.

US Dollar Index H1 Chart - Technical Insights and Views

The US dollar index was moving to the downside steadily on a downtrend last week. This downtrend stopped with the release of the US and Canada labour market related figures. After the shock during the release on the 6th Sept a triangle formation took place. That formation was broken to the upside on the 9th and the USD currently strengthens further.??

EURUSD 15m Chart - News Impact

The EURUSD started to move early on a sideways path with low volatility and low activity as the market was waiting for the most important figure releases for the month. At 15:30 an intraday shock took place with the release of the employment figures for Canada and the US. An up-down volatility with the end result to be dollar appreciation sending the EURUSD to the downside. until the support near 1.10695 before retracement took place back to the 30-period MA. The pair tested again for the second time the support unsuccessfully and remained on the sideways until the end of the trading day and week.?

EURUSD H1 Chart - Technical Insights and Views

The EURUSD has been moving to the upside steadily on an uptrend due to the recent USD depreciation. That ended on the 6th September when the release of the employment data for the US caused USD strengthening and the breakdown of important levels that put a stop to the uptrend. After the rapid drop, the pair retraced to the 61.8 Fibo level, however on the 9th Sept the pair continued to drop due to USD further strengthening. This could be the result of a more stable, higher NFP figure release, and a lower unemployment rate release, 4.20% versus the 4.30%. What is the future of the USD though? Is this going to be a significant turning point for the EURUSD or is just a minor interruption (news driven impact) of the USD's overall weakening path, some days before the Fed's interest rate cuts.

Crypto:

BTCUSD 15m Chart - News Impact

Bitcoin on the 8th Sept was moving early to the upside but as volatility levels lowered it formed an upward wedge. Its breakdown around 13:00 caused the price to rapidly fall until the support near 53,650 USD. A reversal took place though soon after and Bitcoin reversed to the MA closing the trading day near flat.

BTCUSD H1 Chart - Technical Insights and Views

Bitcoin experienced a drop on the 6th Sept reaching the support near 52,600 USD and retracement took place during the 7th with the price reaching the 30-period MA. Bitcoin set a sideways path on Sunday 8th Sept as volatility was low. On the 9th September it seems that it broke a triangle formation to the upside and is experiencing a pullback. This could be an indication of a future upward movement.

Metals:?

XAUUSD 15m Chart - News Impact

Gold was moving sideways with low volatility around the 30-period MA. A shock occurred at 15:30 with the release of the employment data for the US and Canada. The price initially jumped, finding resistance at near 2,530 USD/oz and soon after a full reversal to the 2,500 USD/oz level as the USD started to strengthen significantly. Retracement followed. Then another drop occurred after the breakdown of the important support 2,500 USD/oz with the price reaching the 2,485 USD/oz level support before retracement started to take place.

XAUUSD H1 Chart - Technical Insights and Views

Gold was moving downwards with high volatility. There were indications that the price was quite resilient and always reversing to the downward 30-period MA. The RSI was indicating a slowdown and a potential reversal to the upside that actually happened on the 4th sept. The USD started to depreciate again further as more economic data pointed to further deterioration of labour market conditions, causing a jump for Gold’s price on the 5th. A retracement took place back to the 61.8 Fibo as depicted on the chart. On the 6th Sept Gold dropped following USD appreciation. The price broke the important support area near 2,500 USD/oz and moved to the downside reaching the next support at near 2,485 USD/oz before retracement took place, back to the 2,500 USD/oz.

Energy:?

Crude Oil Cash (WTI) 15m Chart - News Impact

Crude oil was moving sideways with low volatility until the news releases for the US and Canada. The weak employment figures for both regions resulted in USD appreciation. The price of Crude started to fall aggressively and after breaking the 68 USD/b it moved to the downside further until the 66.7 USD/b before retracement took place, back to the MA?

Crude Oil (WTI) Cash H1 Chart - Technical Insights and Views

Crude oil’s price experienced a drop on the 3rd Sept and that drop continued to the next trading day on the 4th of Sept. Its price continued to drop following the drops seen the previous week. On the 6th Sept, after the US and Canada employment figure releases the price dropped heavily breaking that triangle formation as depicted on the chart and moving to the 66.70 USD/b support level. Retracement followed and on the 9th Sept it reached the 30-period MA. It was a great opportunity to catch that breakdown below the 68 USD/b.?

US Stocks:

S&P500 15m Chart - News Impact

The S&P500 index saw an early movement to the downside and quite steady with low volatility. After the employment data release for the US and Canada it jumped. If found resistance at near 5,525 USD before eventually experiencing a huge drop after the market opened. The USD started to appreciate aggressively and stocks seem to move to the downside. It found support at near 5,400 USD but there was no retracement the same trading day indicating that it might happen the next day provided that the intraday high break.

S&P500 H1 Chart - Technical Insights and Views

On the 3rd Sept the stock market crashed. All benchmark indices experienced a drop after the market opening. Technically the S&P500 saw a breakdown after the market opening and dropped without experiencing a retracement the same day. On the 4th Sept though it experienced the retracement, back to the 61.8 Fibo. Volatility levels lowered after that event and a triangle formation took place. The 5,500 USD level proved to be quite significant and its recent breakdown caused another drop. The 5,450 level mentioned in my previous analysis was eventually reached and the index actually reached 5,400 USD following the recent labour market figure releases on Friday 6th Sept. After reaching that support the 9th of Sept found the index retracing, back to the 30 -period MA.?

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NEWS AND ECONOMIC DATA MONITORING?

Today: Preview Analysis (09.09.2024)

Time zone EEST (GMT+3:00) Athens

Midnight > Night Session (Asian)

No important announcements, no special scheduled releases.

Morning > Day Session (European and N. American Session)

China’s CPI inflation was reported lower than expected at 0.6% picking up from the previously reported figure of 0.5%. Inflation picked up in August, although a mild increase from the July inflation figure, while producer price index inflation shrank at the fastest pace in 4 months. No major impact was recorded in the market.

General Impact

Forex:?

EURUSD moves to the downside due to USD appreciation.

Crypto:

Bitcoin is stable and close to 55K USD.

Metals:

Gold is stable moving sideways and within a small range.

Energy:?

Crude oil is also not experiencing significant movement.

U.S. Stocks:

The U.S. indices experience an upward and steady movement upwards.

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Marios C. Kyriakou MSc – Economist, Market Analyst

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