The dollar surged against a basket of the other major currencies on Friday, after the U.S. nonfarm payrolls report showed a slowdown in hiring in December but the fastest wage growth in over seven years.
The Labor Department said the U.S. economy added 156,000 jobs in December from the prior month, while the unemployment rate ticked up to 4.7% from a nine-year low of 4.6% in November. Economists had forecast payrolls rising by 178,000 jobs last month. The report also showed that the annual rate of wage growth rose to 2.9% in December from a year earlier, the strongest since 2009. The employment data indicated that the economy is improving enough for the Federal Reserve to keep pushing up interest rates.
The Fed has indicated that three quarter-percentage-point interest rate increases are on the cards for 2017. Expectations of higher rates tend to boost the dollar, as higher borrowing costs make the currency more attractive to yield seeking investors.
In the week ahead, investors will be looking ahead to U.S. economic reports, particularly Friday’s retail sales figures for December. Investors will also be watching an appearance by Fed Chair Janet Yellen on Thursday and speeches by a handful of other Fed officials during the week. Today financial markets in Japan will be closed for a holiday; Australia is to release data on building approvals; the U.K. is to release industry data on house price inflation; while Boston Fed President Eric Rosengren and Atlanta Fed President Dennis Lockhart are to speak.
The euro/dollar pairing finished Friday at 1.0529, a decrease of 0.70% for the euro.
The single currency lost ground after the the U.S. nonfarm payrolls report showed the fastest wage growth in over seven years.
The Labor Department said the U.S. economy added 156,000 jobs in December from the prior month, while the unemployment rate ticked up to 4.7% from a nine-year low of 4.6% in November. The report also showed that the annual rate of wage growth rose to 2.9% in December from a year earlier, the strongest since 2009.
In the week ahead, investors will be looking ahead to U.S. economic reports, particularly Friday’s retail sales figures for December. Investors will also be watching an appearance by Fed Chair Janet Yellen on Thursday and speeches by a handful of other Fed officials during the week.
Pivot: 1.056Support: 1.051 1.048 1.0435Resistance: 1.056 1.0585 1.0615Scenario 1: short positions below 1.0540 with targets @ 1.0510 & 1.0480 in extension.Scenario 2: above 1.0560 look for further upside with 1.0585 & 1.0615 as targets.Comment: the RSI is capped by a declining trend line.
Gold
Gold prices fell on Friday, retreating from the previous sessions one-month highs as the dollar strengthened against a currency basket after U.S. jobs data showed a slowdown in hiring in December but a pickup in wage growth. The metal was still 1.97% higher for the week, its best weekly performance in two months, helped by a broad weakening of the dollar earlier in the week.
Elsewhere in precious metals trading, palladium ended at a five-week high of $758.35 late Friday. Silver was down 0.73% at $16.52 a troy ounce late Friday, after touching highs of $16.76 in the previous session, its highest since December 15. Copper was up 0.18% at $2.54 a pound and ended the week up 1.6%. Platinum was down 0.32% on the day at $972.85 an ounce but was up almost 7.5% for the week.
In the week ahead, metal traders will be looking ahead to U.S. economic reports, particularly Friday’s retail sales figures for December.
Pivot: 1178Support: 1170 1164.5 1160.5Resistance: 1178 1183 1191Scenario 1: short positions below 1178.00 with targets at 1170.00 & 1164.50 in extension.Scenario 2: above 1178.00 look for further upside with 1183.00 & 1191.00 as targets.Comment: the RSI broke below a bullish trend line.
WTI Oil
Oil futures finished slightly higher on Friday, logging their fourth weekly gain in a row with traders encouraged by signs that major crude producers will adhere to the pledge to curb output.
Prices tallied a weekly gain amid signals that major oil producers, such as Saudi Arabia and Kuwait, are sticking to their pledge to cut back output. January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day.
Meanwhile, indications of increased drilling activity in the U.S. remained in focus. According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by 4 to 529, the tenth straight weekly rise and a level not seen in almost a year.
In the week ahead, energy traders will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
Pivot: 54.34Support: 53.32 53 52.58Resistance: 54.34 54.7 55.07Scenario 1: short positions below 54.34 with targets at 53.32 & 53.00 in extension.Scenario 2: above 54.34 look for further upside with 54.70 & 55.07 as targets.Comment: the RSI is mixed with a bearish bias.
US 500
U.S. stocks were higher after the close on Friday, as gains in the Technology, Industrials and Healthcare sectors led shares higher.
At the close in NYSE, the Dow Jones Industrial Average gained 0.32%, while the S&P 500 index gained 0.35%, and the NASDAQ Composite index added 0.60%.
In the week ahead, investors will be looking ahead to U.S. economic reports, particularly Friday’s retail sales figures for December. Investors will also be watching an appearance by Fed Chair Janet Yellen on Thursday and speeches by a handful of other Fed officials during the week.
Pivot: 2262 Support: 2262 2254 2244 Resistance: 2280 2289 2300 Scenario 1: long positions above 2262.00 with targets at 2280.00 & 2289.00 in extension. Scenario 2: below 2262.00 look for further downside with 2254.00 & 2244.00 as targets.. Comment: the RSI calls for a rebound.