Daily Analysis: Payrolls Miss Sets Up Crazy September

Friday Market Recap

Asset Current Value Daily Change
S&P 500 2475 0.23%
DAX 12162 0.88%
WTI Crude Oil 47.09 -0.30%
GOLD 1327.00 0.54%
Bitcoin 4829 3.35%
EUR/USD 1.1901 -0.08%

After a string of relatively good economic numbers from the US, today’s employment report missed across the board, as the headline Non-Farm Payrolls number came in well below expected, the Unemployment Rate unexpectedly ticked higher, and the Hourly Earnings were also disappointing. Adding insult to injury, last month’s NFP reading was also revised substantially lower, and it is hard to see how the recent problems in the consumer segment will be solved if the labor market turns weaker. US stocks aren’t too worried about growth, as it could mean that the FED will be extra cautious with both rate hikes and the announced balance sheet reduction.

Dollar Index (DXY), 4-Hour Chart Analysis

The Dollar was back in the spotlight after the report, as the currency was sold heavily on the ugly numbers before a violent snapback rally. The Greenback recovered most of its losses against its major peers, as the Euro first got close to 1.20 than dipped back to 1.19 in a matter of minutes. Gold reached up to $1330, hitting a new rally high on the way, but it fell below $1325, as volatile trading followed the report. The first trading day of the autumn season will likely be wild, and that could set the tone of the whole month, as we are expecting fireworks following the quiet summer period. Oil is holding up well after the recent rebound, and the commodity was only hurt a little by the dismal employment figures.

S&P 500, 4-Hour Chart Analysis

Cryptocurrencies

Crypto investors are having another solid session, as one the last laggards of the market, Ethereum Classic finally joined the party, and surged by more than 20% so far during today’s session. Bitcoin and Litecoin hit new all-time highs in the meantime, while most of the majors are also in the green as well. While BTC’s rally is not a spectacular one, the most valuable coin now reached $4850, and it’s eying the once ridiculed $5000 mark, as the currency crossed the $80 billion capitalization level. With the always exciting crypto-weekend approaching, we still expect explosive moves, despite the increasingly risky environment.

ETC/USD, 4-Hour Chart Analysis

Technical Picture

The DAX briefly dipped to a new 5-month low earlier this week, and the index touched the key support zone near 11,900 that we have been monitoring in recent weeks. The benchmark quickly recovered above the 12,000 level thanks to the weakness of the Euro, and it is now testing the dominant declining trendline yet again. The picture looks set for a short-term rally towards 12,375 or 12,500, but alleys will be on the FED and the Dollar during September, especially after today’s NFP numbers.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
10:30 UK Manufacturing PMI 56.9 55.0 55.1
14:30 US Average Hourly Earnings 0.1% 0.2% 0.3%
14:30 US Non-Farm Payrolls 159,000 180,000 209,000
14:30 US Unemployment Rate 4.4% 4.3% 4.3%
16:00 US ISM Manufacturing PMI 56.5 56.3

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
10:30 UK Construction PMI 51.9
All DAY US Bank Holiday 0.2% 0.3%
All DAY CANADA Bank Holiday 180,000 209,000

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Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.