USD: NZD and MXN Strong Candidates to Benefit From Soft Payrolls [2/2]
Jun-06 10:56
- Conversely, the resilience for equity benchmarks amid the cautious optimism surrounding US/China negotiations has been benefiting the likes of AUD and NZD, while the Mexican peso closed at its best level since September yesterday. Even the escalation of the Trump/Musk conflict and the associated nosedive for the Tesla share price had very little effect, and could signal that topside momentum could gather pace should the US employment figures disappoint.
- For AUDUSD, yesterday’s close above 0.6500 was the highest in 6 months, keeping trend signals bullish. The pair recently cleared a key short-term resistance at 0.6515, the May 7 high, confirming a resumption of the uptrend and signals scope for an initial climb to 0.6550, a Fibonacci retracement and the Nov 25 high. It is worth noting that US election related highs remain a medium-term target at 0.6688.
- The 1.1% rise this week for NZDUSD has seen the pair return to an important zone of resistance between 0.6025/40. Spot continues to threaten a daily close above the US election related highs, signalling scope for a more protracted recovery towards 0.6168, the 76.4% retracement of the Sep ’24 – Apr ’25 selloff.
- USDMXN has narrowed the gap to the September/October lows between 19.06-11, as bearish conditions have dominated following the significant range breakout in April. This comes despite the pessimism surrounding the Mexican growth trajectory and the heightened dovish profile of the central bank. Further USDMXN weakness would place attention on the Aug ’24 lows at 18.60.
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OPTIONS: Expiries for May07 NY cut 1000ET (Source DTCC)
May-07 10:56
- EUR/USD: $1.1400(E763mln)
- USD/JPY: Y142.50($804mln), Y143.00($595mln), Y143.20($746mln), Y145.50-55($1.1bln), Y145.85-00($1.6bln)
- EUR/GBP: Gbp0.8555-68(E501mln)
- AUD/USD: $0.6400(A$676mln), $0.6600(A$717mln)
- USD/CAD: C$1.3750-65825mln), C$1.3775-80($961mln)
- USD/CNY: Cny7.2000($500mln)
EQUITIES: Estoxx outright Put buyer
May-07 10:46
SX5E (16th May) 4650p, bought for 2.4 in 5k.
OUTLOOK: Price Signal Summary - Trend Structure In Gold Remains Bullish
May-07 10:45
- On the commodity front, Gold has recovered from its recent lows and this suggests the correction between Apr 22 - May 1, is over. A continuation higher would refocus attention on key resistance and the bull trigger at $3500.1, the Apr 22 high. Clearance of this level would confirm a resumption of the primary uptrend. Key short-term support has been defined at $3202.0, the May 1 low. A break of this level is required to signal scope for a deeper retracement.
- In the oil space, a medium-term bearish trend in WTI futures remains intact and short-term gains are considered corrective. The move down that started Apr 23 signals the end of the correction between Apr 9 - 23. That cycle higher allowed an oversold condition to unwind. Attention is on $54.67, the Apr 9 low and a bear trigger. Clearance of this level would resume the downtrend and open $53.72, a 2.236 projection of the Feb 20 - Mar 5 - Apr 2 price swing. Key resistance to watch is $64.12, the 50-day EMA.
