Weekly Summary: The Non-Farm Payrolls Last Parade

This Friday is very unusual, as the very important Non-Farm Payrolls data will be released on the day of a major holiday in the Western economies. This is also intriguing considering controversial calls from different incoming labour market data in March. Most of the previous month was pretty uneventful, as jobless claims experienced normal upside down movements. But during March 30 through to April 6 jobless claims furiously jumped by 133,000.

This may indicate the beginning of an economic downturn in the United States. So, will this serious worsening of the labour market be partially included in the March data or not? Logically this data should be excluded from the March statistics, making this Non-Farm Payrolls data quite positive. In this case our statistical modeling would suggest that the Non-Farm Payrolls figure will be close to 265,000 new jobs in the American economy, well above consensus of 265,000. The ADP figures came out to be quite pessimistic at 145,000 new jobs created in the U.S. economy during March.

The unemployment level should remain at 3.6% if the same logic to not to include the sudden jump of jobless claims into March observations is followed. This is in line with the consensus. To sum up, the March labour market report is seen to be rather strong. If the negative trend that emerged in the labour market at the end of March continuous, than the upcoming labour market report will be the last one in the U.S. before the economic situation dramatically deteriorates. Negative surprises in this report would lead to investors’ acute reaction on Monday, when markets open after thea long holiday.

Technically, the S&P 500 index will extend its formation to the upside with targets at 4150-4250 points. The index reached the lower margin of this range in the middle of the week, which is enough to consider that the upside targets are met.

Oil market traders have all eyes on the resistance of $86 per barrel of Brent crude. If this resistance level is crossed, the rise of crude prices to $94-96 per barrel will be the primary scenario. If this is the case, the downside trend will be eliminated. If the resistance survives, the recession scenario will become the leading factor dragging down prices to $40-60 per barrel of the Brent crude benchmark.

Gold prices are moving inside the mid-term, upside formation with targets at $2000-2100 per troy ounce by the middle of 2023. Prices broke through the resistance level of $1890-1900 per ounce amid a shocking quake in the U.S. banking system and the widening fears of a possible banking crisis in Europe. They have reached the target zone. However, prices are likely to tumble before they can resume climbing towards extreme targets at $2400-2500 per ounce.

The U.S. Dollar is expected to be supported in April by the emerging upside signals. Short trades for EURUSD opened at 1.06700-1.07200 with a downside target at 5000 points below the opening level and the same 5000 points for a stop-loss order are intact. The decline of the EURUSD to 1.05000-1.05500 was used to close half of the trade. The other half should be continued until the targets of 1.03000-1.03500 are met.

Besides, short positions for AUDUSD from 0.66900-0.67400 with the target of 3500 points and the same stop-loss order could be considered interesting. Short positions for GBPUSD from 1.23300-1.23800 with the target of 5000 points and the same 5000 points for a stop-loss order could be considered. Rising risks and market volatility could prompt trade volumes to be reduced.