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American Payroll Rises in Growth

A guest post written by DAR Wong

Currency Market Observations – 08 May 2017

Fundamental Outlook

The U.S. payrolls increase almost 3 times than March. Rate hike is in market talk again possibly in mid-year season. China’s manufacturing expands at 7-month low record while British manufacturing still soars. U.K> net mending also rises in gains.

The U.S. Institute of Supply Management reports its manufacturing index rose to 54.8 in April, lowest record in past 4 months. Construction spending contracted 0.2 percent in March against revised 1.8 percent gains in previous month.

Another report on U.S. personal spending remained flat in February and little change in past 3 months. President Trump says he is considering in breaking up big banks in order to stimulate their growth faster. Nasdaq rose to record high on Wednesday to 6102 points followed Trump’s remarks.

The U.S. weekly claims for jobless benefits improved for the week ended 29 April at 238,000 and down from previous week 257,000 cases. Trade deficits remained stagnant at USD43.7 billion and almost same to February.

American U.S. non-farm payroll rose 211,000 in April and higher than expected. Unemployment rate dropped to 4.4 percent and best record since May 2007. Analysts predict the next rate hike might come in June.

China’s caixin manufacturing expands at 50.3 in April and records at 7-month low. Caixin’s services index rose to 51.5 and lowest in 9-month record, compared to 52.2 in March.

U.K. manufacturing index climbed to 57.3 in April and highest in 2-1/2- year record. Markit reports the service index expanded to 55.8 in April and best record in past 4 months. Net lending to individuals increased to GBP5.7 billion in March and maintained steady growth for consumers.

Technical Forecast

USD/JPY has been trading strong last week amid rising U.S. stocks. This week, we reckon the trend will be supported at 111.80 area and possible climb higher to 114.00 target. Sentiment is resilient in market as picking bottom may give better potential for profiting in this uptrend.

EUR/USD has shown strong buy signal as it closed at 1.0998 on Friday. This week, the trend could be well supported at 1.0900 region in case of falling back. The bulls may aim for 1.1150 target over 1-2 weeks if we forecast correctly of a rising Euro after French election.

GBP/USD also exhibits resilient pattern as the bulls stand above 1.2900 levels. This week, we foresee the trend will rise higher if the aforementioned support could remain intact. Immediate target is aimed at 1.3150 region if Pound leads into recovery trend this week.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

DAR Wong is a registered fund manager in Singapore with 26 years of global trading experiences. You may reach him at dar@pwforex.com

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

 





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