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Forex trading US Nonfarm Payrolls: Can we trust the data? Brent Crude Oil at $100 again [Video]
Confirmed
In Short: Brent Crude oil prices have surged to $100 per barrel amid increased tensions in Iran, while the US Non-Farm Payrolls report showed a strong job market, bolstering the US Dollar.
Brent Crude oil prices have surged to $100 per barrel amid increased tensions in Iran, according to reports. The conflict in the Middle East has supported crude prices, which jumped nearly 10% last week following military activity around the Strait of Hormuz and an attack on Saudi Aramco’s Jazan facilities.
The US Non-Farm Payrolls report for last week showed a substantial number of new jobs created, expanding by 162,000 positions, while the Unemployment Rate remained unchanged. This strong labor market has raised concerns about potential rate hikes by the Federal Reserve, which could strengthen the US Dollar.
Forex traders are now focused on upcoming US Producer Price Index and Consumer Price Index inflation data, which could further shape rate expectations. The USD/JPY is recovering from six-month lows, retesting 154.00 in European trading on Tuesday, while USD/CAD continues to retreat for a second consecutive session, trading around 1.3800 during Asian hours.
Sterling was punished for the good news in the US labor market, with the GBP/USD pair facing downward pressure. Market participants are now looking ahead to inflation data, which could determine the next moves in the currency markets.
What's confirmed
What's still developing
- In today’s Market Outlook, let’s take a look at Forex trading on the Dow Jones Industrial Average, Brent Crude Oil, USD/JPY, USD/CHF and GBP/USD.
- Here, as well, on the 15-minute chart, we saw a whipsaw of about 50 pips and, again, our technicals picked the top of the movement.
- West Texas Intermediate (WTI) crude trades near three-month highs around $90.50 per barrel, supported by escalating conflict in the Middle East.
- It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
- The last thing to move this pair was Friday's US Nonfarm Payrolls (NFP), which printed 162K against a 56K consensus.
- A strong American labour market raises the odds the Federal Reserve (Fed) tightens again, a tighter Fed means a stronger Dollar, and a stronger Dollar means a lower GBP/USD.
- The Bureau of Labor Statistics reported Friday that nonfarm payrolls rose by a seasonally adjusted 162,000, the strongest monthly gain since March.
- "An upside surprise in payrolls will likely ramp up concerns about a rate hike, but that outcome is in the hands of next week's inflation numbers," she said.