Japanese Yen Strengthens, European Indices Trigger Sell Signals
07 July 2023
Thursday's trading was marked by the release of the ADP non-farm employment change report, which far exceeded expectations, coming in close to 500,000 versus an expected 226,000. Additionally, the ISM services PMI report was robust, registering at 53.9 as opposed to the anticipated 51.23.
In the Forex market, the Japanese Yen emerged as the strongest player, appreciating against other major currencies. We saw the lowest level since June 21st on the Canadian Dollar to Japanese Yen pair. Meanwhile, the EURUSD pair confirmed the 1.084 support, and as long as we stay above this level, the outlook remains positive.
Indices worldwide took a significant hit on Thursday. Particularly in Europe, both DAX and French CAC signaled a potential bearish turn. They formed a shoulder pattern and broke the necklines, triggering a strong sell signal. This was exceptionally evident on DAX, with the neckline breaking the key support at 15700 points, a strong bearish signal.
Turning our focus to commodities, gold missed its chance for a buy signal, failing to break out of the current wedge pattern to the upside. Meanwhile, oil is steadily moving toward the mid-term resistance of the sideways trend observed since May, albeit with low momentum.
As for Friday's expectations, it's all about the non-farm payroll report from the US. The market anticipates an addition of 224K jobs, and the unemployment rate is expected to drop from 3.7% to 3.6%. These figures could significantly influence market trends, especially the dollar's performance, and should, therefore, be closely monitored.