China reopening and a US ISM services PMI drives trade
Nasdaq=>The index struggles at 12000
Oil =>The commodity rises above 80.00
EUR/GBP=> The pair rises towards 0.86
Nasdaq holds steady after NFP & ahead of the services PMI
The Nasdaq closed mildly lower on Friday after a stronger-than-forecast US non-farm payroll report. The US economy created 263,000 jobs last month ahead of an expected 200,000. October’s job creation was also upwardly revised to 284,000, up from 269,000. Unemployment held steady at 3.7% defying expectations of a rise to 3.8%, and average hourly wages also jumped by more than expected to 5.1% YoY. The data suggests that the US labour market remains strong despite high inflation and rising interest rates, raising questions over the extent to which the Fed can slow the pace of rate hikes. Today attention will remain on the economic calendar with the release of the ISM services PMI in addition to factory orders. The ISM services PMI is expected to rise to 55.6, up from 54.4. The level 50 separates expansion from contraction.
Where might the Nasdaq price head to?
The Nasdaq has been in consolidation mode, supported on the downside by the 50 sma and on the upside by 12100, last week’s high. The RSI continues above 50, keeping buyers hopeful of further gains. Buyers could look for a rise over 12100 to expose the 200 sma at 12480, with a rise above here bringing 12900 the September 13th high into focus. On the downside, a break below the 50 S ma could open the door to 11,000 the round Number ahead of 10,600, the November low.
Oil jumps on China reopening& after OPEC+ holds steady
Oil rises by 1% at the start of the week after OPEC+ agreed to keep its production targets unchanged in the meeting over the weekend and as Chinese cities relaxed strict Covid curbs raising optimism of a full reopening. Meanwhile, the G7 price cap on Russian oil could limit gains, potentially impacting supply. OPEC had agreed in the October meeting to cut output by two million barrels per day until the end of November next year. The next OPEC+ meeting will be on the 1st of February. Meanwhile, the G7 price cap for Russian seaborne crude oil was agreed upon at $60 per barrel and is expected to come into force today. However, there are questions about how effective it will be given that Russia sells most of its oil to countries such as China and India which will not be part of the price cap.
EUR/GBP rises ahead of PMI data & eurozone retail sales
EUR/GBP is rising at the start of a new week after booking losses last week, the fourth straight week of declines. The euro had fallen after inflation fell by more than expected in November to 10% from 10.6%. This called into question whether the ECB will raise interest rates by 75 basis points or, at a slower pace of 50 basis points. Attention now turns to a busy economic calendar with the composite PMI, Sentix investor confidence, and eurozone retail sales data. Retail sales are expected to decline by 0.6% in November after rising by 0 .4% month on month in October. Meanwhile, investor morale is expected to improve, which could offer some support to the euro. The pound rose last week, lifted by a broad upbeat mood in the market and despite few data releases. Today the UK composite PMI, which is considered a good gauge of business activity, is expected to show that the UK economy is contracting.
Support could be seen at 0.8545 (200 sma) and 0.85 (round number).
Resistance could be seen at 0.8675 (last week’s high) and 0.87 (50 sma).