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More USD gains as JOLTS rises further; Can Gold break $1300?

Summary:

  • USD rising against all currencies barring SEK
  • March JOLTS figure hits 6.55M
  • Gold dropping back towards $1300 level. Can it make a break lower?

The US dollar has extended its recent gains today with the buck rising against all of its peers apart from the SEK (which has received a boost from the latest Riksbank minutes). There’s not really been a catalyst for today’s gains although they certainly haven’t been hindered by the only real economic release of note this afternoon, which has shown more pleasing data for the labour market.

The latest JOLTS figure (Job Openings and Labor Turnover Summary) rose pretty sharply to 6.55M in March, well above the 6.02M expected. The prior reading was subject to a small upwards revision and now reads 6.08M vs 6.05M. Whichever way you look at it this is clearly a strong reading 

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 US JOLTS rose further in the latest release, with the employment indicator hitting its highest level in quite some time. Source: Bloomberg

The EURUSD has continued to drop today and fallen below 1.1850 after breaching the 1.19 handle. The market has been in a fairly steady state of decline since the last ECB meeting when the key support of 1.2155 was decisively broken. This decline amounts to a move of over 300 pips, but if we include the weakness seen ahead of the break it is apparent that the market has fallen around 550 pips in a little over 2 weeks. 

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 The EURUSD has hit fresh lows today as the market continues to decline following the break of 1.2155 last month. Source: xStation

The bulk of the declines have come about due to strength in the USD, and the appreciation of the greenback can be seen in the price of Gold, with a fairly strong inverse relationship present over the past month. The price of Gold has been threatening to break out of its remarkably narrow trading range for 2018 in the past week or so, but as yet the market has failed to make a clean break. The closing low from last Tuesday at 1303.60 could be a level worth watching and if there’s much more upside seen in the USD then it could force the market to break back below the 1300 handle.

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 Gold is once more dropping lower and could be set to make a break below the 1300 level? Source: xStation

Finally, it is worth pointing out that US president Trump is set to make an announcement on the Iranian nuclear deal this evening (7PM BST) and any shocks there could have a significant impact on the price of Gold - even if most traders will be looking to Oil for a market reaction. 

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