This Is How the Inflation and Jobs Data Will Pan Out This Week

Justin Freeman

Inflation and Jobs Data

The week beginning 31st March will be a shorter one for US and UK markets, thanks to the Memorial Day holiday and UK Bank Holiday on Monday. This doesn’t necessarily mean that it will be a quieter one. Inflation is the current hot topic and data releases on this subject from around the world are imminent. Then on Friday, the all-important monthly jobs report from the US will be released.

Price has consolidated in most major markets over the last week. Major indices and the currency markets are all trading within a 1% range – a clear suggestion that investors are prepared to wait for the US Non-farm payroll numbers to offer a sign before taking their next step.

Instrument 24th May 31st May Hourly Daily % Change
GBP/USD      1.4154      1.4190 Strong Buy Strong Buy 0.25%
EUR/USD      1.2192      1.2198 Strong Buy Strong Buy 0.05%
FTSE 100        7,038        7,003 Neutral Strong Buy -0.50%
S&P 500        4,167        4,207 Neutral Strong Buy 0.96%
Gold        1,881        1,905 Strong Buy Strong Buy 1.28%
Silver        2,768        2,796 Strong Buy Strong Buy 1.01%
Crude Oil WTI        64.17        66.65 Strong Buy Strong Buy 3.86%
Bitcoin      35,717      34,503 Strong Sell Strong Sell -3.40%

Source: ForexTraders

The hourly and daily indicators have turned bullish thanks to the relative stability of the markets – the GBPUSD market being a good example of consistent trading volumes and the daily 20 SMA catching up with recent price increases.

GBPUSD Mini Chart

Source: IG

The suggestion from technical indicators is that there will be a steady-as-she-goes feel to trading, but the problem with this is that those metrics are backwards rather than forwards facing. The data points to look out for this week are:

Monday 31st May

Germany Consumer Price Index

Japan Retail Sales

Japan Consumer Confidence

Tuesday 1st June

Eurozone Consumer Price Index

Reserve Bank of Australia Interest Rate Decision

Wednesday 2nd June

Eurozone Producer Price Index

Thursday 3rd June

US ADP Employment Change

US Initial Jobless Claims

Friday 4th June

Eurozone Retail Sales

US Non-farm Payrolls

The US jobs data is the big number and any suggestion that the economy’s recovery is stronger than expected will stir the markets. Demand for USD over the last 14 months has largely been down to it being considered a safe haven, but buying pressure could increase if US economic strength also needs to be factored in.

USD Blanket Chart

Source: IG

The support line dating back to 2018 is now a key level. It’s currently sitting near the psychologically important 9,000 price level, offering a double incentive for USD bulls to consider going long. Weekly RSI is in the middle of the range, showing no sign of being overbought or oversold.

US Dollar Basket Chart

Source: IG

Considering the extent to which analyst forecasts of NFP numbers have been off recently, there’s a strong possibility that the market could be surprised by Friday’s numbers.

The path of least resistance for USD appears to be upwards.

  • Target 1 Weekly 20 SMA is currently trading at 9105.80
  • Target 2 Weekly 50 SMA at 9222.02

If you want to know more about this topic, please contact us at [email protected].

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