Dollar down and gold up as JOLTS disappointed

BY Janne Muta

|April 5, 2023

Markets reacted bearishly yesterday after the JOLTS job openings came in well below expectations and the previous month's reading. The number of job openings decreased to 9.9 million in February. This was the lowest reading since 2021. The number was also sharply lower than January’s number which was revised to 10.6 million. Equities closed slightly lower with the bond market rallying strongly. This pushed the yields down and boosted gold.

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As the market's focus is on employment data, today's ADP report and ISM services PMI release are likely to provide us with added volatility and more trading opportunities. Keep an eye on Gold, DJ, NAS and DAX.

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Dax shows signs of weakness near the resistance created in February this year (15 708). After three days of rallying and one sideways day, the market created a daily rejection candle. This is bearish and increases the risk of a market correction. A decisive break below 15 550 would be likely to lead the market down to 15 380 and then to 15 260 on extension. Alternatively, above yesterday's high the market could trade down to 15 850.

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Gold is bullish above 2018. Below the level, the market could retrace to 2005 or so. Above the 2018 level, the market could move to 2050. Earlier range trading changed to a strong range breakout after the market created a higher swing low at 1977 and penetrated the 1990 resistance level. The move was supported by dollar weakness, lower yields and general risk aversion in the markets.

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NZDUSD is bullish above 0.6310 after a higher-than-expected interest rate hike from the RBNZ (50 bp vs. 25 bp expected). The nearest resistance area is at 0.6390 - 0.6412. Below the 63.10 level, the nearest support level is at 0.6275.

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EURCAD broke out of a bearish trend channel and is now bullish above 1.4670. The nearest support level is at 1.4718 and above the level, the market could rally to 1.4760 and then to 1.4820 on extension. If the 1.4718 breaks a retracement to 1.4670 could be in the cards.

The Next Main Risk Events

  • USD ADP Non-Farm Employment Change
  • USD ISM Services PMI
  • CAD Employment Change
  • CAD Unemployment Rate
  • USD Unemployment Claims
  • CAD Ivey PMI
  • USD Average Hourly Earnings m/m
  • USD Non-Farm Employment Change
  • USD Unemployment Rate

For more information and details see the TIOmarkets economic calendar.

Trade Safe!

Janne Muta
Chief Market Analyst

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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.

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