Canadian employment data due out today

The US weekly initial jobless claims figure came in lower than expected, which may have alleviated some concerns that arose in regards to the US Labour market easing. In particular the initial jobless claims figure came in at 233k versus the expected 241k and was lower than the prior figure of 250k, which appears to have been a much needed relief for market participants, who may have been concerned about the status of the US economy. Although in our view,  we continue to maintain our belief that the market continues to be overreacting.Chicago Fed President Goolsbee  according to some sources stated yesterday that “we are getting back to more normal conditions in the US economy” which could further ease the market’s concerns about a potential overtightening scenario by  the Fed after an unexpected increase in the unemployment rate last Friday.On a political level, former President Trump has agreed to a debate with Vice President Harris which is set to occur on the 10^th of September on ABC.Canada’s employment data for July is set to be released later on today, during the American session. According to market participants the employment change figure is set to come in higher than the prior figure at 26.9k, yet the overall story may be the expected increase in the unemployment rate from 6.4% to 6.5%. In the event that the unemployment rate comes in as expected or higher and thus implies a loosening labour market, it may increase pressure on the BOC to cut interest rates sooner rather than later, which in turn may weigh on the Loonie. On the flip side should the unemployment rate come in lower than expected and thus imply a resilient labour market, it may provide the bank with greater leeway should they decide to withhold from cutting interest rates in their meeting which in turn may aid the CAD. According to Yahoo Finance , Microsoft (#MSFT) will be selling AI to government agencies according to a headline. Such a scenario could increase revenue for Microsoft (#MSFT) which may aid its stock price.

XAU/USD appears to be moving in a sideways fashion. We a op for a sideways bias for the precious metal and supporting our case is the smoothening out of the bolligner bands , in addition to the RSI indicator below our chart which currently registers a figure near 50, implying a neutral market sentiment. For our sideways bias to continue we would require the commodity to remain confined between the 2390 (S1) support level and the 2470 (R1) resistance line. On the flip side for a bullish outlook we would require a clear break above the 2470 (R1) resistance line with the next possible target for the bulls being the 2520 (R2) resistance level. Lastly, for a bearish outlook we would require a clear break below the 2390 (S1) support line, with the next possible target for the  bears being the 2330 (S2) support level.

GBP/USD appears to be moving in a sideways fashion and supporting our case is the pair’s failure to break below and above the 1.2680 (S1) support line and the 1.2775 (R1) resistance level respectively. Moreover, the RSI indicator below our chart currently registers a figure near 50, implying a neutral market sentiment. For our sideways bias to continue we would require the pair to remain confined between the 1.2680 (S1) support line and the 1.2775 (R1) resistance level. On the flip size for a bullish outlook we would require a clear  break above the 1.2775 (R1) resistance line with the next possible target for the bulls being the 1.2855 (R2) resistance level. Lastly, for a bearish outook we would require a clear break below the 1.2680 (S1) support level with the next possible target for the bears being the 1.2615 (S2) support level.

Other highlights for the day

Today in the European session, we get Germany’s final HICP rate, Norway’s CPI rates and Canada’s employment data all for July

XAU/USD 4H Chart

• Support: 2390 (S1), 2330 (S2), 2275 (S3)
• Resistance: 2470 (R1), 2520 (R2), 2570 (R3)

GBP/USD 4H Chart

• Support:  1.2680(S1), 1.2615 (S2), 1.2525 (S3)
• Resistance: 1.2775 (R1), 1.2855 (R2),  1.2945 (R3)

If you have any general queries or comments relating to this article please send an email directly to our Research team at research_team@ironfx.com

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