The US economy added 206,000 jobs in June, surpassing the 200,000 forecast but less than May's revised gain of 218,000. The unemployment rate unexpectedly rose to 4.1%, the highest since October 2021. Job gains were driven by government jobs, health care, social assistance and construction, but declines occurred in professional and business services and retail. The report supports that the Federal Reserve may cut interest rates soon, possibly by September.
DOW JONES
U30USD (Daily). Dow Jones is the only index that did not touch its all-time high last week. The movement is stable and forming of a bearish-pennant pattern. Further confirmation of a rate cut in September could put it beyond the 39,380 level. A delay of the rate cut beyond 2024 could push the DJ below 38,780.
GOLD
Gold prices surged to their highest level in a month, reaching $2,392 per ounce, following US jobs data that indicated a softening labour market and increased expectations of a Federal Reserve interest rate cut in September. This data bolstered market confidence in a September rate cut, with a 72% implied probability, and a possible second cut in December. The dollar weakened and US Treasury yields fell, making gold more attractive.
XAUUSD (Daily). After the rally that started in February, Gold entered into a consolidation between 2,290 and 2,390, having broken the resistance once. Price is retesting the 2,390 level, but needs the market to believe more rate cuts are on the way to push it beyond its all-time high at 2,450.
OIL
US West Texas Intermediate (WTI) crude futures came close to $84 a barrel following a significant drop in US oil inventories. The gains were fuelled by a 12.2 million barrel draw in US crude stocks, far exceeding the anticipated 680,000 barrels. Traders are also monitoring geopolitical events and potential impacts on the oil market. Russia's Rosneft and Lukoil plan to cut oil exports from the Black Sea, while Saudi Aramco reduced the price for its Arab light crude in Asia.
WTIUSD (Daily). Strong bullish movement in June, oil is moving slower near the resistance area at 84.00. A good chance for WTI to hit the next region between 86.60 and 89.00.
POUND
The UK's Labour Party won a significant parliamentary majority in the general election, securing 412 out of 650 seats with just 34% of the total votes cast. This result contrasts with the Conservative Party's nearly 24% of the popular vote and smaller parties' 43% share, which yielded less than 18% of the seats.
GBPUSD (Daily). Investors viewed the Labour’s win as being positive for the pound. This pair is expected to head towards the resistance level at 1.2850.
Fullerton Markets Research Team
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