The dollar fell on Friday as the latest U.S. employment report showed that jobs growth beat expectations but wage growth remained tepid, which will likely prompt the Federal Reserve to adopt a more cautious approach on raising interest rates this year.
The Labor Department said the U.S. economy added 227,000 jobs in January from the prior month, while the unemployment rate ticked up to 4.8% from 4.7% in December, as more Americans joined the workforce.
Economists had forecast nonfarm payrolls rising by 175,000 last month.
However, average hourly earnings rose 2.5% in January from a year earlier, slowing from 2.8% in December. The slowdown in wage growth prompted speculation that the Fed will avoid hiking interest rates too quickly.
In its latest monetary policy statement on Wednesday the Fed stuck to its view that the economy is strengthening, but gave no clear signal on the timing of its next rate hike as officials wait to assess the possible economic impact of the Trump administration’s protectionist policies.
President Donald Trump signed an executive action that establishes a framework for scaling back the 2010 Dodd-Frank financial-overhaul law, part of a sweeping plan to dismantle much of the regulatory system put in place after the financial crisis.
In the coming week, China is to release data on trade activity, while a report on German factory orders will be in focus in the euro zone. The U.S. is to release monthly trade figures in what will be a thin week for economic data.
GBP/USDThe dollar gained against the pound on Friday, with GBP/USD down 0.32% at 1.2483. Sterling came under pressure after data on Friday showing that growth in the dominant UK service sector slowed for the first time in four months in January.
Growth in Britain's services sector slowed for the first time as rising costs hit consumer spending. The data was the latest indication that the sharp fall in sterling since the June Brexit vote could act as a drag on growth.
U.S. trade data will remain in focus for this week.
Pivot: 1.251Support: 1.251 1.254 1.2565Resistance: 1.246 1.2425 1.24Scenario 1: short @ 1.2485 with targets @ 1.2460 & 1.2425 in extension.Scenario 2: above 1.2510 look for further upside with 1.2540 & 1.2565 as targets.Comment: the RSI is mixed to bearish.
Gold prices rose in the U.S. on Friday, despite the stronger U.S. employment data as wage growth was relatively weak and as a recent drop in the dollar increases demand for the precious metal.
Gold was 2.14% higher for the week, amid concerns over Donald Trump's presidential policies and a lack of clarity on the timing of future rate hikes.
Gold crossed $1220 on Friday, reaching levels last seen in November.
For this week the U.S. is to release monthly trade figures in what will be a thin week for economic data.
Pivot: 1218Support: 1218 1214 1210Resistance: 1230 1233 1241Scenario 1: long positions above 1218.00 with targets at 1230.00 & 1233.00 in extension.Scenario 2: below 1218.00 look for further downside with 1214.00 & 1210.00 as targetsComment: the RSI advocates for further upside.
U.S. energy companies added oil rigs for a 13th week in the last 14, extending a nine-month recovery as drillers take advantage of crude prices that remain higher than $50 a barrel since OPEC agreed to cut supplies in late November.
Drillers added 17 oil rigs in the week to Feb. 3, bringing the total count up to 583, the most since October 2015, energy services firm Baker Hughes Inc said on Friday.
The rising U.S. production, led by shale drillers, hurts efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and other producers like Russia to end global oversupply by cutting their output.
Inventory data from the U.S. will be in focus for this week.
Pivot: 53.62Support: 53.62 53.35 53.17Resistance: 54.23 54.5 54.73Scenario 1: long positions above 53.62 with targets at 54.23 & 54.50 in extension.Scenario 2: below 53.62 look for further downside with 53.35 & 53.17 as targets.Comment: the RSI advocates for further upside.
The main U.S. indices were higher on Friday, as gains in the Financials, Oil & Gas and Industrials sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average added 0.94%, while the S&P 500 index climbed 0.73%, and the NASDAQ Composite index gained 0.54%.
Some of the best performers of the session on the Dow Jones Industrial Average were Visa Inc (NYSE:V), which rose 4.59%, Goldman Sachs Group Inc (NYSE:GS) which added 4.57% and JPMorgan Chase & Co (NYSE:JPM) up 3.06%.
Strong U.S. employment data combined with an increase in the unemployment rate and a weak rise in wages failed to give a clear indication on the future monetary policy of the Fed.
In the coming week, the U.S. is to release monthly trade figures in what will be a thin week for economic data.
Pivot: 2280 Support: 2280 2270 2263 Resistance: 2299 2305 2315 Scenario 1: long positions above 2280.00 with targets at 2299.00 & 2305.00 in extension. Scenario 2: below 2280.00 look for further downside with 2270.00 & 2263.00 as targets. Comment: the RSI is mixed with a bullish bias.