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The US Job report compiled an erratic move in the Commodity Markets on Friday. The number of new jobs created in January, increased by 151,000 which came lower than the forecast for 189,000, while the unemployment rate fell to the almost 8 year low at 4.9 percent against the forecast of 5 percent.
The average hourly earnings m/m rose by 0.5% against the forecast 0.3 percent. This signals a resilience in the current U.S. job market .It also helps stabilize the outlook for inflation and growth going forward, given that wage rate growth can act as a precursor to income and consumer spending growth.
The U.S. Dollar pulled lower initially, following the weaker NFP report but pushed higher again by the improved unemployment rate and average hourly earnings growth, based on what this predicts for the future of economic growth and pricing power in the system.
Gold hit the 1163.00 level briefly after the release of the US NFP data but was rejected strongly from that zone and initiated a strong selloff to make a new low for the day at the 1145.00 level.
Fig: Gold Hourly Technical Chart.
Gold has fallen 1.00 percent so far today propelled by the release of the US jobs report. It broke below the 1150.00 level and may be approaching the next support at the 1137.00 level. Price is still above SMA50 and SMA200 but if the current bearish momentum sustains it will cross down below the SMA50 on the hourly chart soon. Intraday bias has turned to bearish right now from the earlier bullish picture, as the price broke the strong support 1150 which is expected to work as immediate resistance for now. It shall be interesting to observe where the markets close for the day/week and may help gauge the sentiment going into next week.
Buy Digital Put at 1149.50 and Digital Call at 1141.00.
Copper has dropped 1.39 percent so far after being rejected from the resistance zone at the 2.1270 level. Given that the industrial metal relies on rosy prospects for growth going forward, the initial disappointment from a smaller jobs number may have affected the market and caused it to move lower. However, on balance the market may find stability after matching the lower growth concerns with the falling unemployment rate and improvements in the hourly earnings.
Fig: Copper Hourly Technical Chart
Copper broke the interim support at 2.1064 propelled by the strengthening of dollar . Currently it is approaching to the next support at 2.0858. Price has crossed down below the SMA50 on the hourly chart and also stochastics have turned lower. The bearish momentum is gearing up gradually and breakdown of 2.0858 would lead towards further moves to the downside.
Buy Digital Put at 2.099 and Digital Call @2.088.
Crude Oil has fallen 1.70 percent so far today after being rejected strongly from the 33.50 resistance level on Thursday. The crude market seems to be caught in the cross winds of a retracement from multi year lows, having fallen more than 75% from above the $100 price levels that were in place about 15 odd months ago, and the pressure being faced the world over, in terms of a supply demand mismatch. While growth rates seem to be ebbing the world over, crude oil production and supply levels remain unchanged. The general sentiment in the market almost seems to be uncompromisingly bearish, which has not helped the cause of Crude Oil much.
Fig: WTI Oil Hourly Technical Chart
Crude Oil hit the strong support zone at 31.30 after the release of US Job report data. Currently, it is holding the support zone but further acceleration in current bearish momentum might lead it to breach the 31.30 level and to initiate a vivid selloff. If the support holds and the market manages a close near/above the 32 levels, it may provide some stability to this volatile market.
Buy Digital Put at 31.20 and Digital Call @30.20.