JOLTS come in higher than expected

In the US the JOLTS job openings figure for May came in higher than expected, at 8.140M versus the expected figure of 7.960M. The better-than-expected figure may imply a tight labour market and thus may increase pressure on the Fed to maintain interest rates at their current levels for a longer time period than expected by analysts. As such market attention now turns to the ADP Non-Farm payrolls figure for same month, where should it also imply that the labour market remains tight, we may see the dollar gaining. However, should it imply a loosening labour market it could instead weigh on the dollar. Fed Chair Powell’s comments yesterday underscored the bank’s hesitancy to start cutting rates, despite the implications that the labour market may be cooling down. As such, should further policymakers adopt a relatively more hawkish sentiment, it could provide support for the greenback. Over in Europe, we would like to note that the EV tariffs imposed by the EU against China will be coming into effect tomorrow. ECB President Lagarde reiterated that the bank’s rate-cutting path is set to be a bumpy ride ahead, which may provide support for the EUR should further policymakers echo the aforementioned remarks.

XAU/USD appears to be moving in a sideways fashion. We maintain a neutral outlook for the commodity and supporting our case is the narrowing of the Bollinger bands which may imply low market volatility 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 2319 (S1) support level and the 2334 (R1) resistance line. On the flip side, we would immediately switch our sideways bias in favour of a bullish outlook should the commodity make a clear break above the 2334 (R1) resistance line with the next possible target for the bulls being the 2350 (R2) level. Lastly, for a bearish outlook we would require a clear break below the 2319 (S1) support line with the next possible target for the bears being the 2295 (S2) support base.

EUR/USD appears to be moving in an upwards fashion. We maintain a bullish outlook for the pair and supporting our case is the upwards moving trendline which was incepted on the 27th of June. However, the RSI indicator below our chart currently registers a figure near 50, implying a neutral market sentiment. Nonetheless, for our bullish outlook to continue, we would require a clear break above the 1.0770 (R1) resistance line, with the next possible target for the bulls being the 1.0845 (R2) resistance level. On the flip side, for a sideways bias we would require the pair to remain within the sideways moving channel defined by the 1.0675 (S1) support line and the 1.0770 (R1) resistance level. Lastly, for a bearish outlook, we would require a clear break below the 1.0675 (S1) support level, with the next possible target for the bears being the 1.0600 (S2) support base.

Other highlights for the day

Today we get Turkey’s CPI rate for June, France’s Service PMI figure, the Eurozone’s final composite PMI figure and the UK’s composite PMI figure all for the month of June. During the American session, we would like to note the US ADP Employment figure for June, the US weekly initial jobless claims figure, Canada’s trade balance figure for May, the US final composite PMI figure for June, the US Factory orders rate for May, the US ISM Non-Manufacturing PMI figure for June and the US weekly EIA crude oil inventories figure. In tomorrow’s Asian session, we would like to note Switzerland’s unemployment rate for June. On a monetary level, during the European session, we note the Riksbank’s June meeting minutes, the speeches by ECB Vice President De Guindos, ECB Chief Economist Lane and New York Fed President Williams. During the American session, we note the speech by ECB member Knot, ECB President Lagarde and the highlight of the day which is the release of the FOMC June meeting minutes.

XAU/USD 4H Chart

• Support: 2319 (S1), 2295 (S2), 2271 (S3)
• Resistance: 2334 (R1), 2350 (R2), 2368 (R3)

EUR/USD 4H Chart

• Support: 1.0675 (S1), 1.0600 (S2), 1.0530 (S3)
• Resistance: 1.0770 (R1), 1.0845 (R2), 1.0910 (R3)

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