SGT Chart Book 06.05.24

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Last Week's Highlights

US Job data (non-farm payroll: NFP)

Job growth slowed and unemployment ticked higher last month. U.S. employers added a seasonally adjusted 175,000 jobs in April, the Labor Department reported on Friday. That was far less than in March, when gains exceeded 300,000. It was also below the 240,000 jobs that economists had expected.

Friday’s report will keep hope alive for a late-summer interest-rate cut from the Fed, because it eases fears of an overheating economy.

Stocks climbed. The Dow Jones Industrial Average rose 1.2%, its best day in more than a month. 10-year U.S. Treasury note yields falling to 4.498% from 4.569% Thursday.

 

FOMC

Earlier in the week, Fed Chair Jerome Powell said that he is happy that the labor market remains in good shape, and that inflation can come back down to the Fed’s target without a big increase in unemployment. Powell reiterated that recent inflation data likely means it will take longer before the Fed starts cutting interest rates.

However, Powell also signaled Wednesday that the Fed was unlikely to raise interest rates any further. He suggested that the central bank was ready to cut rates in response to “unexpected weakening in the labor market,” though he cautioned that it would likely take more than a small increase in the unemployment rate for the Fed to act.

 

Apple

The company reported better than expected earnings and the board had authorized a$110 billion share repurchase. See chart below for price action.

 

USDJPY

Yen traded above 160 briefly a 34 year low for the currency.

USA30

The Dow rallied over 1% for the week, giving YTD 2.6%. The upward trend is still your friend.

USA100

The Nasdaq is up 1.4% on the week and 7.6% year to date. After suffering sell off with retest of previous ATH area (horizontal blue dotted line), more positive fundamentals coupled with short covering has propelled index higher.

US10 YEAR RATES

FOMC and NFP data help push rates back to a low on Friday of 4.45%. Technically we are tracing out a well-formed up channel.

APPLE

After a period of weaker prices, better earning and largest ever share repurchased help Apple gap higher.

DXY

After breaking above the channel top, we saw a failure at the previous highs, to encourage the bears to step in. USDJPY activity has pulled the Dollar index (DXY) around. Lower US interest rates provided support for sellers.

EURUSD

Confined to down channel, short-term resistance seen at trendline around 1.08 level.

USDJPY

After highlighting the 160-area last week, it was the 1990’s last time we saw this level. USDJPY was the focus of the FX markets last week. After an initial rally to Y160.20 early in the week. BOJ intervention stories have been mentioned by many market followers, pushing prices back to as low as the 152 level. Hourly price chart shows the waves of selling.

XAUUSD

Corrective price action is the flavor of the week, we have seen lower highs on subsequent rallies.

XAGUSD

Break above trendline, would encourage Bulls to step back in.

USOIL

Last week saw oil close lower each day. Trendline support seen off the recent lows could provide some initial buyer interest from technical perspective.

BTCUSD

After initial sell-off through channel base around the $59.5/60k level, weekly net outflows of BTC ETFs were seen. Rumors of large accumulation of $3 billion in BTC from whales might explain some of the rally.

Short term trendline resistance seen at current levels.

Join us next week, for more market insights.

 

Happy trading,
SGT Trading Desk

trading@sgt.markets

Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.

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