The US Jobs report failed to overwhelm investors on Friday, and the economic number brought a major shock for the dollar bulls who were hoping for a strong number. The thing is that most of the economic data that we received last week was fairly bullish, so there was no reason not to anticipate that the US NFP numbers weren’t going to be bullish. However, the actual number was no short of a disappointment, and this is what investors are focusing on today as well.
The fact that the US jobs report wasn’t a lofty number, many traders know that now they will not have to worry about taper talk, which became a sticky point for the market players last week. Given the fact, the economy is still not on firm footing, and the economic numbers such as consumer confidence and ISM manufacturing aren’t that strong, the Fed is very much going to leave the word taper out of their conversation during this month when they will announce their monetary policy.
Something that investors and traders do need to keep in mind is that they should not be carried away with Friday’s job number as well. It is true, as mentioned above, that the numbers weren’t heartwarming, but the fact also is that the labour market is moving in the right direction, and that is not only positive for the economy but also for the stock market as well. That is because a steady recovery remains a risk for the precious metal gold, which experienced some recovery on Friday due to the weakness in the dollar index.
Gold prices closed well off the lows of their last week on Friday, but the price action failed to score positive gains for the week. Traders will be looking at two important price levels when it comes to gold price this week, and that is the high of the last week, 1916, and the low of the last week, 1,855. Only a break of these points in any direction is going to determine the further direction of the gold price. Looking at the dollar index’s price action, it seems that the gold bulls are still in control of the price for now. This means we are likely to see more upward moves for the gold price.
As for the weekend news, the G7 members have agreed on the US proposal of putting a global corporate tax on earnings. The agreed number is 15%. If this becomes a law, it would be a significant development in global taxation.
Over in Asia, the price action has been mostly mixed as investors had to stomach the Chinese trade data. Chinese exports jumped higher in the dollar terms in May. The number rose 27.9% (year on year basis), but it was short of the forecast of 32.1 (year on year basis)
In the crypto space, we had another lacklustre weekend for Bitcoin trading. This is despite the fact that El Salvador has become the world’s first country where Bitcoin has officially received the reputation of a legal tender. Although, on the macro front, this is still a very small country that isn’t going to have any profound influence, the fact that Bitcoin has become a legal currency in El Salvador is certainly a moment of celebration. If we look at the Bitcoin price from a price analysis perspective, there is no doubt that bulls are still lacking control of the price action. All eyes are on the 30K support level, and a break of that support is likely to be violent for Bitcoin’s price action.