ATFX Comment: The United States added 25,000 new confirmed cases yesterday, with a total of 1.263 million confirmed cases and a total of 74,800 deaths. The epidemic is still serious and there is no sign of a significant slowdown. Trump inspected Arizona mask production plants, but did not wear masks, which shows that the United States does not pay enough attention to the new crown pneumonia epidemic. However, Trump is still calling for a restart of the economy. Currently, more than 40 states in the United States plan to "resum work" this weekend. It can be seen that the United States will follow the route of " herd immunity to ", which is a major negative news for US dollar US stock . This negative is reflected in the data, which is the changes in the labor market.
Figure 1, Financial calendar data on May 8-ATFX
The first week of each month will be released. The non-farm employment report for April will be released at 8:30 pm tomorrow (8th). In the report, there are three data that need to be paid attention to by traders. First, the total number of non-agricultural employment decreased by 701,000 in March. The April data was expected to decrease by 22 million, with a large increase. It is expected to be negative for the US dollar and US stocks. Considering that the ADP data on Wednesday showed that there were problems in the US labor market in April (reduced by 20.236 million), the market was mentally prepared, so the impact of the data tomorrow may decline; second, the annual rate of the unemployment rate in April was 4.4% in the previous value. , the expected value is 16%, which also rose sharply, because the 5% unemployment rate represents full employment in the labor market, so the unemployment rate data will have a major negative impact on the US dollar and US stocks; third, the annual rate of hourly wage growth in April. The important thing is that we not only need to observe the increase in the number of employed people, but also the stock, that is, the working people who have already started their jobs, are their wage levels increasing or decreasing compared to last year, or remain unchanged. The most basic requirement is that the annual growth rate of hourly wages should be higher than the domestic inflation rate, which is the so-called income outperforms inflation. The average hourly wage annual rate is 3.1%, the expected value is 3.3%, and the current US CPI is 1.5%, which is at a healthy level.
Overall, the possibility of negative US dollars in the non-agricultural employment report in the evening is relatively high, and EURUSD is likely to close the positive K-line from 8:30 to 8:40. However, the reason for urging traders to observe and track non-farm employment reports is not to participate in the short-term data market for ten minutes, but to use economic cycle rules through data changes to judge which stage of the global/US economy is currently in recovery/bubble/recession/depression. This is the top priority.
Figure 2, Sino-US bond yield trend chart - ATFX
Bond yield represents the ability of economies to create returns, and the US bond yield can represent the trend of the global economic cycle. On March 9, the yield hit a new low of 0.559%, and the yield has remained above this level since then, but it only showed a second bottoming out on April 21. From a technical perspective, U.S. bond yields have recovered slowly, with the current level of 0.711%, and have not yet broken through the previous high of 1.266%, indicating that the US and global economies are still in the end of recession or early stages of recovery. We should look at safe-haven assets, such as gold bonds, and bearish pro-cyclical varieties, such as US stock crude oil.
Figure 3, USD index daily trend chart - ATFX
Technical perspective, RSI is in the balance zone, and the future trend of the USD index is insufficient, so it is recommended to wait and see;
MA5 and MA10 moving averages are entangled, indicating that they are currently in a volatile market, so it is recommended to wait and see;
early top fractal resistance is 100.84, and the previous bottom fractal support is 98.73. If the USD index gets out of the oscillating zone with a long positive/long negative trend after tomorrow's non-agricultural data is released, you can participate in short-term trading with a trend, but you should pay attention to light positions to avoid excessive risks.
ATFX Disclaimer:
1. The above analysis is provided by Dean, senior ATFX analyst.
2. The above analysis only represents the analyst's views. The foreign exchange market is risky and investment should be cautious.
3, ATFX will not be responsible for any profit or loss that may arise from direct or indirect use or reliance on this information.
4. Some content comes from the public information of the network
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