Fundamental analysis GBPUSD, EURUSD, NZDUSD, AUDUSD, XAUUSD, Brent, WTI for 10.01.2022
The U.S. currency lost value on Friday after the publication of weak U.S. labor market data. The number of people employed outside the agricultural sector grew by only 199 K, while Bloomberg had forecast a growth of 400 K in December. The actual data disappointed the market participants, as the ADP report published two days earlier pointed to more positive figures. However, unemployment fell to 3.9% and average hourly earnings rose 4.7%. The U.S. labor market is very strong and inflation will continue to rise, which is fully consistent with the Fed's plans. It is worth noting that more than 6 million U.S. citizens were able to find jobs in 2021, and about 3 million people need to be employed to reach the pre-pandemic employment level. At the moment the market estimates the probability of a rate hike in March and June at 90%. Moreover, now Goldman Sachs Group experts forecast 4 acts of monetary policy tightening in 2022.
EUR/USD strengthened on Friday, but on Monday it lost half of the progress made on the last trading day of the previous week. Notably, the European currency did not react to a record increase in inflation in the euro area, as well as an increase in retail sales. It would be logical if the ECB would use the current statistics to abandon monetary stimulus, but investors do not believe that the European Central Bank will abandon its "dovish" policy.
The British currency is the main competitor to the USD at the moment. The fact is that the Bank of England is also preparing to raise its key rate, but sooner than the Fed, namely in February. GBP/USD gets support both from the weakness of USD and from the "hawkish" mood of the regulator. GBP looks like a very attractive asset, however, we cannot ignore the strength of USD amid US macroeconomic indicators and actions of the Fed. Investizo recommends considering buying GBP against currencies with high beta coefficients and buying GBP against the weak JPY.
Commodity currencies strengthened last Friday on the back of short-term weakness in the dollar. AUD/USD received moderate support today as Australian construction permits rose 3.6% in November. The Australian economy is recovering after a long lock-up, so the macro data remains positive. The NZD/USD lost some ground amid a difficult epidemiological situation. Also worth noting is the fall of risk appetite among investors. USD/CAD pair is trading within the framework of the downtrend correction. Strong employment data in Canada cannot provide significant medium-term support to CAD. The pair recovered on Monday due to lower oil prices. Investizo believes that the pair will continue to trade within the correction today. The speech of Fed chief Powell and the publication of the EIA report on the energy market may also have a significant impact on the pair tomorrow.
Oil prices are slightly down today, but the fundamental data and also geopolitical situation point to the upside potential. Brent and WTI continue to hold above strong psychological levels. In January the market's surplus supply might shrink due to disruption of supplies from Kazakhstan and Libya. In addition OPEC+ forecast, also indicates a continuation of growth in the hydrocarbons market.
XAU/USD is consolidating near the key 1800 level. The fall in gold prices was facilitated by the closing of a large volume of long positions in short-term speculative trading. Already three times this year, the "bulls" failed to keep gold at 1830. In the current situation, you can consider opening long positions from the range 1800-1805.05.