Weekly Outlook | NFP data leads the way, ECB might now follow

Important events this week:

With 142,000 new jobs created in the US, the Nonfarm Payrolls data made for volatile trading on Friday last week. The Dollar had barely moved in the days prior, trading only slightly in the red. Friday, however, saw short-term losses for the Greenback, with stock markets in particular being heavily penalized. All major indices had moved downwards and the trend could now continue. Apart from the ECB’s interest rate decision, there is only little important data on the agenda this week.

– UK – Claimant Count Change – The insight into the labor market from the UK could move the Pound. Data will be released early on Tuesday morning, with a slowdown in jobless claims from 135,000 to 95,500 expected. In this case, the Pound could then move positively. Following the NFP data from the US, the GBP had turned lower again, with further pressure seen in the GBPJPY currency pair.

The weekly chart shows that the price was unable to break through the resistance area, which is primarily marked by the 50- moving average, to the upside. Downward potential could now be the result if the market can break the level of 186.00 on the downside.

On the other hand, there is still a long way to go to the 190.00 area, which could suggest downside potential. The data will be published on the 10th of September at 08:00 CET.

– US Consumer Price Index – Consumer prices are currently no longer the primary focus of market participants, but could continue to move the market in the event of a divergence. A fall from 2.9% to 2.6% is expected for the year as a whole. This would be a further indication that the Fed could then cut interest rates this month if the data materializes. No change is currently expected month-on-month.

In this context, the S&P 500 is now in focus. Here, the pressure on the market could continue, which was already felt last week. Further potential could emerge at least up to the 5270.00 area. The data will be published on Wednesday, 11 September at 14:30 CET.

– EU – Key interest rate decision – The ECB’s interest rate decision should now provide further clarity for the Euro. Overall, the single currency had been able to move higher, although the market currently seems to be taking a break. The potential against the US Dollar initially ended at the 1.1200 mark.

As the weekly chart above shows, there could now be fresh downside potential if the resistance zone cannot be broken. Dovish (soft) words from Christine Lagarde on the future outlook could move the market. A break of the psychological level of 1.1000 could then create further downside potential. The ECB’s interest rate decision will take place on Thursday, 12 September at 14:15 CET.