European Open: EU inflation and NFP up next

Asian Indices:

Australia's ASX 200 index rose by 51.3 points (0.73%) and currently trades at 7,114.90
Japan's Nikkei 225 index has risen by 177.84 points (0.0069%) and currently trades at 25,998.64
Hong Kong's Hang Seng index has risen by 110.16 points (0.52%) and currently trades at 21,162.33
China's A50 Index has risen by 75.38 points (0.57%) and currently trades at 13,406.61

UK and Europe:

UK's FTSE 100 futures are currently up 22.5 points (0.29%), the cash market is currently estimated to open at 7,655.95
Euro STOXX 50 futures are currently up 29 points (0.73%), the cash market is currently estimated to open at 3,988.48
Germany's DAX futures are currently up 94 points (0.65%), the cash market is currently estimated to open at 14,530.31

US Futures:

DJI futures are currently up 125 points (0.38%)
S&P 500 futures are currently up 50 points (0.46%)
Nasdaq 100 futures are currently up 17.25 points (0.45%)

With inflation data for Germany, France and Spain falling below expectations this week, there’s hope we’ll see a similar result for EU CPI today
That said, a soft inflation print is unlikely to deter the ECB from hiking at their next two meetings (in 50bp increments)
NFP is the main event and 200k jobs added is the consensus and for unemployment to remain at 3.7%
Yet a firm ADP report yesterday has helped to support the US dollar ahead of today’s NFP report, in anticipation of a beat
Whilst 200k is low in recent history and shows a loss of momentum (which the Fed expect anyway), it is not likely enough for the Fed to become dovish
Therefore 200k or more jobs added today could continue to support the (arguably oversold) US dollar

Gold 1-hour chart:

Gold had a great start to the year during a period of low liquidity, although yesterday’s bearish outside/engulfing day suggests some mean reversion is due. With the 20-day EMA and bullish trendline residing around $1815, I’m not looking for an oversized countertrend move on the daily chart (yet). But it might provide a decent bearish opportunity for intraday traders if NFP surprises to the upside.

Today’s bias remains bearish below $1850 near the weekly R1 pivot. The 50-bar EMA and 1842.80 low is capping as resistance, which places a zone between 1842 – 1850 to seek evidence of a potential top. The RSI (2) is overbought and price action is within its third wave higher, which suggest a near-term corrective top could be approaching.

USD/CAD 1-hour chart:

Price action on the daily chart has been less than ideal in recent weeks due to its choppy and erratic nature. But it has carved out a decent range between 1.347 – 1.370 over this period of time, and that could provide better opportunities on the 1-hour chart.

The rally from the weekly S1 was seen on rising (and above) volume to show new buyers entering the market. Prices have since retraced within a falling wedge pattern, which is a potential bullish reversal. Support has since been found on the weekly pivot point with a small bullish hammer. We’re now looking for momentum to turn higher and head for 1.3600 – which would be greatly helped should NFP surprise to the upside whilst Canada’s employment is worse for wear.

Economic events up next (Times in GMT)

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