US dollar slides after disappointing jobs data

The US dollar declined sharply against most currencies after disappointing non-farm payroll data. The numbers released by the Bureau of Labor Statistics showed that the economy added 75K jobs in May. This was much lower than the expected 185k and April’s 224k. Manufacturing jobs rose by 3K, lower than the expected 5k. The unemployment rate remained at 3.6% while the average hourly earnings dropped to 3.1% in May. These weak numbers came two days after data from ADP showed that the economy added just 25k jobs in May. They also came as it emerged that the Fed was considering cutting rates as early as  June.

The price of crude oil rose sharply after Saudi Arabia announced a deal to extend the supply cuts in the December meeting. The minister said that the kingdom did not want a fight for market share with the United States or a repeat of the price collapse 5 years ago. In the deal, the OPEC+ members agreed to cut production by 1.2 million barrels every day from January 1. As the members prepare to meet at the end of the month, they are under pressure to raise prices, which have fallen to a bear market.

In signs that the global economy was softening, data from Germany showed that the exports and imports declined sharply in April. The exports dropped by a MoM rate of -3.7%, which was worse than the expected decline of -0.9%. They had risen by 1.6% in March. Imports declined by -1.9%, which was worse than the expected -0.2%. As a result, the trade surplus narrowed to 17 billion euros. The industrial production also declined by -1.9%, which was lower than the expected decline of -0.4%.

EUR/USD

The EUR/USD pair rose sharply to a high of 1.1325 as the dollar weakened against the euro. This was a continuation of the gains started on Monday when the pair traded at 1.1110. On the 12-hour chart, the pair has crossed the important resistance level of 1.1300 as shown below. It is also testing the upper side line of the Bollinger Bands while the commodity channel index has moved above the overbought level. The pair will likely continue moving higher after the weak jobs data.

XBR/USD

After days of declines, the XBR/USD pair rose today after bullish comments by the Saudi Arabia oil minister. The pair is now trading at 61.80, which is along the 25-day moving averages and below the 50-day moving average. On the chart below, the signal and RVI lines of the relative vigor index have started moving up. The RSI indicator too has been moving higher. The pair will likely continue moving higher, to test the important resistance level of 64.

USD/CHF

The USD/CHF pair declined sharply after NFP data from the US. The pair is now trading at 0.9875, which is the lowest level since Wednesday. On the hourly chart below, the price is below the 25-day and 50-day moving averages while the RSI has dropped sharply to test the oversold level. The accumulation/distribution indicator too has dropped. The pair will likely move higher if it forms a double bottom pattern after testing the important 0.9853 support.