Weekly Outlook | ADP And NFP In Focus Amid A Mixed USD

Last week markets closed positive after initial statements that a peace- deal between the US and Iran had been reached. Despite the absence of an agreement, stock markets continued to rise and now marked two months of rising prices. This marks the longest winning streak in markets since 2023. The general outlook also remains positive. The Greenback does currently not offer much strength and the odds of a recession remain absent. Should dovish words of the designated new chairman of the Fed, Kevin Warsh, follow the positive momentum might be due to continue.

This week, traders will focus on the two employment reports from the United States as well as the purchasing manager indices. Apart from that also Canada’s employment data might shed interesting insights into the economy. Since the beginning of the year unemployment data has been rising while the Loonie (CAD) lost momentum. Traders will focus on the USDCAD currency pair, which has now reached a technical resistance zone.

Important events this week:

– US- ADP employment change– The ADP report is expected to show 116.00 newly created jobs this month, which will be a higher reading compared to the recent report. A positive direction can be observed in general as the momentum keeps rising. Last month’ data missed the expectation slightly but still came in high at 109.000. The US- dollar might be affected and offer momentum into either direction. 

EURUSD weekly chart

The EURUSD currency pair has been trading in a sideways trading pattern in mostly a year. While it remains rather far from the technical resistance zone of 1.1800 the important support level of 1.1575 should be in focus. Should the ADP report offer a higher reading the pair might start to break lower. Since the market also continues to trade below the 50- moving average resistance level falling prices could also be on the cards. The data will be released on Wednesday, the 03^rd of June at 14:15 CET.

– US- Nonfarm Payrolls report– the last two NFP reports surprised markets positively as both outperformed the expectation. This release is expected to lag behind slightly with only 95.000 jobs as compared to the 115.000 and 178.000 in the two months prior. While the outlook in the US remains positive a weaker reading might also support markets. The Fed might hence be prone to new rate- cuts, in order support the economy. 

XAUUSD weekly chart

The strong uptrend in the gold market recently got a dent. Yet, the correction to the downside also faced an end as the positive candlestick from last week revealed. Rising prices might hence now be on the cards if the market can continue to trade above the psychological USD 4,500 price level. Above the USD 4,600 handle the uptrend might gear up steam again potentially pushing the price back up towards the old highs. The NFP report will be released on Friday, the 05^th of June at 14:30 CET.