Daily Market Report

07/04/2023
10:40

The U.S. stock market will be closed today which means that we will likely see low liquidity trading conditions. However, the focus will be on the March jobs report that will be released despite markets being closed.

Traders should focus on three main economic indicators that can trigger high volatility today.
The Non-Farm payrolls are expected to have declined from 311K down to 239K, on the opposite, Average Hourly Earnings are likely to rise from 0.3% to 0.4%, while the unemployment rate is expected to remain unchanged at 3.6%.

Below, we will be analyzing the latest price action developments in the major currency pairs alongside gold.

EURUSD

The Euro traded sideways on Thursday due to the lack of economic releases.
Technically, we can see that prices continue to move within a defined range in the near term between 1.0970 resistance and 1.0880 support. Therefore, we will be waiting for a break outside of this zone to confirm the next direction in the Euro.

Meanwhile, when looking at the recent advance from the 1.0520 low, we can see that the trend is still bullish as the single currency is respecting a series of higher highs and higher lows.

Therefore, the downside risk is likely to remain limited while prices continue to trade above the 1.0790 low in the coming hours.

In the short term, a break above 1.0970 can lead to a continuation higher toward March highs at 1.1035 while a breakdown below 1.0880 support should expose the 1.0840-1.0820 zone.

GBPUSD

The British pound began to show some signs of weakness as the pair closed in the red for the second day in a row.
As of now, the downside retracement can extend lower in the coming hours to reach the next support zone located between 1.2395 and 1.2360 if prices remain below the hourly resistance of 1.2490.

On the opposite, a bounce from support should lead to a retest of 1.2490 resistance, while a break above it can target the weekly high at 1.2520.

To conclude, the pair is expected to remain well-supported unless we see a daily close below the main support of 1.2275. In the meantime, a successful breakout above 1.2520 is needed in the coming days to confirm the current positive outlook.

USDJPY

The pair traded in line with our expectations as we have seen price recovery reaching a high of 131.90 on Thursday.

For the time being, the pair is approaching a key resistance level located at 132.20 which represents a formerly broken support that is expected to become a new resistance.
Therefore, prices can make another push toward the resistance mentioned above before seeing a continuation to the downside that can target 131.30 followed by the 130.95 level.

Looking at the biggest picture, the downside trend should remain intact while prices continue to trade below the 133.80 high. Consequently, the current advance should be considered as corrective.

USDCAD

The pair managed to extend its correction higher reaching the psychological resistance of 1.3500 following an extended move to the downside.

In the short term, the focus should be on the 1.3540-1.3560 zone as it represents an important area for sellers. This zone is expected to act as resistance if tested in the coming days and the pair is likely to reverse lower as the main trend is still bearish.
Traders should wait for prices to reach the resistance zone mentioned above, before looking for a continuation to the downside.

Looking at important technical levels in the near term, the 1.3540 level represents a key resistance while 1.3460 followed by 1.3440 are seen as strong support levels.

GOLD

Gold retreated on Thursday after reaching a high of $2032 per ounce this week.
The doji candle mentioned in our previous report was a clear warning for a pause in the existing uptrend. Therefore, we might see an extension lower in the coming hours due to profit taking ahead of the weekly close. However, it is important to note that US jobs report figures are likely to trigger high volatility especially since most exchanges will be closed tomorrow.

Technically, the trend remains bullish, and traders should focus on the 2000-1985 support zone to provide strong demand for prices. In extension, if the yellow manages to hold above yesterday’s low, then we will be looking for a new rally in the direction of the 2015 level followed by $2022 per ounce.

Economic Analyst
Amine Hiani