Forex Signals Brief March 8: The NFP Closing A Loaded Week

The day began with significant movements in the currency markets, particularly the JPY crosses, driven by strong pay growth forecasts from Japan’s largest union and speculation that the Bank of Japan (BOJ) might consider raising interest rates. The market is pricing in a 40% chance now of an increase during this month’s meeting, although some analysts believe the likelihood could be higher due to recent signals. However, there is caution among some traders due to previous false signals from the BOJ.

Later on, the European Central Bank (ECB) meeting was another focal point of the day, where the ECB trimmed its inflation outlook but did not indicate any immediate plans for a rate cut. Initially, the euro dipped on the reduced inflation expectations from the ECB, but later reversed its losses. Lagarde’s statement about gaining more clarity on inflation in April and June suggested that April might not be a significant turning point. Consequently, the Euro turned bullish after an initial dip.

Despite weakness in certain areas, global GDP growth remains decent, and the US dollar weakened further amid concerns about disappointing jobs data expected today, while yesterday’s unemployment claims came in as expected. Meanwhile, the stock market continued its strong performance as major indices printed new record highs, with shares of companies like Nividia climbing even higher.

Today the economic calendar is light during the Asian and European sessions, but in the US session we have the Canadian Labour Market report for February which is expected to indicate an addition of 21,100 jobs, a slowdown from the 37,300 jobs added in January. Concurrently, the unemployment rate is anticipated to tick higher to 5.8% from the previous 5.7%. Wage growth will be closely watched, as it is a significant concern for the Bank of Canada (BoC).

The US Nonfarm Payrolls (NFP) data for February is anticipated to reveal an addition of 200K jobs, a decrease from the 353K jobs added in January. The unemployment rate is expected to remain unchanged at 3.7%. Year-over-year average hourly earnings are forecasted to be at 4.4%, slightly lower than the previous year’s 4.5%, while the month-over-month measure is expected to be 0.3%, down from 0.6% previously.

Additionally, average weekly hours are predicted to increase to 34.3 hours from the previous 34.1. However, it’s essential to note that the most recent data surprised the markets with a significant deviation, as there was a substantial beat in several areas. The household survey indicated the second consecutive decline in employment, and average weekly hours plummeted to levels typically seen in a recession. This skewed the average hourly earnings print, presenting a mixed picture of the labor market.

Yesterday the volatility increased the forex market, and we opened many trading signals, all of them reached the targets. We had six trades closed by the end of the day, ending up with four winning forex signals and two losing ones.

Investors are showing persistent interest in gold as a hedge against inflation, leading to increased demand for the precious metal. The price of gold, represented by XAU/USD, continues its upward trajectory as buyers consistently push its value higher. Breaking through numerous resistance levels, gold surged above the $2,100 mark earlier this week and reached as high as $2,167 today before experiencing a slight pullback to $2,150 where we decided to open a buy gold signal which closed in profit as buyers came back soon.

There’s a significant downward movement in USD/JPY, influenced by both bearish sentiment and the impact of higher Average Cash Earnings figures from Japan. Opening a sell forex signal at around 148 proved to be a profitable decision, considering the subsequent decline in the pair’s value to the 147.50s,

USD/CAD – 240 minute chart

BTC experienced a volatile session yesterday, after reaching a new all-time high the day before. Finding support near the 50-period Simple Moving Average (SMA) suggests a potential reversal in the short term. Your decision to initiate a buy signal at the support level seems well-timed, considering the subsequent rebound in price. However, the failure to surpass the $70,000 level…