The U.S. economy created 115,000 new jobs in April, below market consensus of around 170,000 and the last month's revised up reading of 154,000. Meanwhile, unemployment rate ticked lower to 8.1% from 8.2% on a declining labor force of nearly 350,000 workers. Earnings dropped as well, printing zero percent growth.
The figures all indicate a sluggish employment recovery, hinting the economy is still far from normal employment levels of pre-crisis times. Thus, we may see further pressure on the U.S. dollar as QE3 expectations could build up.
The EUR/USD pair has been trading in narrow range since morning and before the NFP, however the pair is currently attempting to regain upside momentum on a weaker dollar, a retest of 1.3175 resistance is possible now, and a break above could lead to 1.3220 followed by 1.3280. To the downside 1.3100 is the key level towards 1.3050 and 1.3000.
The GBP/USD is attempting to rebound from the key 1.6165 support, the level managed to halt the recent downside attempts so far. A retest of 1.6300 will follow breaching 1.6220 again. Breaking below 1.6165-1.650 looks less probable now, however if happened downside targets will extend to 1.6075-1.6060.
The USD/JPY continues to fluctuate within relatively narrow ranges among the main descending channel that has been confining price action since weeks. We anticipate a test of 79.60-79.50 support, and a break below it shall confirm further bearishness in the near term. The bullish scenario looks unlikely, however breaking above 80.60 is required for any bullish move to be sustained towards 81.80 again.
Gold rallied after touching 1625.00 main support level, currently looking for a run towards 1.645 and the top of the descending channel, followed by 1665.00 level, while Stochastic has completed a bullish crossover supporting the bullish bias. 16625.00 should remain intact for the bullish bias to remain effective.
Technical analysis for precious metals with major support and resistance levels and recommendations for 18-08-2009