European Open: US government avoids shutdown, NFP in focus

Asian Futures:

Australia's ASX 200 futures are up 52 points (0.72%), the cash market is currently estimated to open at 7,301.50
Japan's Nikkei 225 futures are up 110 points (0.4%), the cash market is currently estimated to open at 27,863.37
Hong Kong's Hang Seng futures are down -135 points (-0.57%), the cash market is currently estimated to open at 23,474.64
China's A50 Index futures are up 89 points (0.58%), the cash market is currently estimated to open at 15,591.74

UK and Europe:

UK's FTSE 100 index fell -39.47 points (-0.55%) to close at 7,129.21
Europe's Euro STOXX 50 index fell 0 points (0%) to close at 0.00

Thursday US Close:

The Dow Jones Industrial rose 617.75 points (1.82%) to close at 34,639.79
The S&P 500 index rose 64.06 points (1.42%) to close at 4,577.10
The Nasdaq 100 index rose 113.045 points (0.71%) to close at 15,990.76

Funding was set to run out on Friday at midnight EST, but Democrats voted 69-28 to keep the lights on until February 18^th, just hours after the Senate won the vote to approve the measures just hours earlier (by 221 – 212, with one Republican voting in favour). S&P 500 E-mini futures are down around -0.17 although the overnight low respected the previous record high set in September, which makes 4550 a pivotal area this session.

Metals hang onto their weekly lows ahead of NFP

Silver has found resistance around $22.50 overnight and is forming a potential bear-flag. Markets are clearly positioned for a strong employment report, which in effect is a proxy for a faster Fed taper and hike. Next support is around $ with the monthly S1 pivot just below it, whilst a break above $23.0 warns of a trend reversal on the hourly chart.

As for gold we mentioned the important of 1758 support in today’s video, and it could make an initial bearish target today should NFP come in strong. Whereas a surprise miss would bring 1780 into focus with a break above 1782 warning of a change in trend on the hourly chart.

Perhaps WTI has finally seen its low

From peak to trough WTI has fallen around -23% from October’s high. Yet a bullish hammer formed on the daily chart yesterday with above-average volume, and its low held above the August low. We therefore suspect it could be time for a bounce form current levels.

US and Canadian employment released simultaneously today

Employment remains the key for the Fed to tighten policy faster. We all know inflation is ripping the roof off, but the Fed want to see continued improvement, with one Fed member saying yesterday that whilst he wants to accelerate the pace of bond purchase tapering he wants to see continued momentum in the monthly payroll report. Economists expect 553k jobs to be added, up from 531k, so perhaps another cool half a million will suffice to get the US dollar bid today.

Canada’s employment softened last month to end a stellar run of job growth, although the unemployment rate fell to a 20-month low whilst hours worked returned to pre-pandemic levels. Unemployment is expected to fall further to 6.6% today whilst adding 35k jobs.

USD/CAD is an obvious go-to currency pair around today’s double-bill employment reports. The daily trend is firmly bullish on the daily chart with strong demand apparent above 1.2700. Yet we have noted that USD/CAD has failed to close above the 1.2820 (close) high over the previous three days, so it may make an interesting countertrend set-up should job growth surprise to the downside in the US and bear in Canada. 1.2775 may provide immediate support for bears but a break of it opens-up a ruin for the lows just above 1.2700. Should US data outperform then we would want to see a clear break of this week’s highs before assuming bullish trend continuation.

Choppy trade on the FTSE

Price action on the FTSE 100 looks like it still wants to move higher, having found support at its 200-day eMA, yet yesterday’s bearish inside day which closed bac below the monthly pivot was a little underwhelming. Looking at the futures charts also highlights how ‘sticky’ prices are around 7110/20 as its been the most actively traded price over the past 28 hours and 20 days. For that reason, we’d prefer to stick to range trading strategies until the FTSE break above 7200.

FTSE 350: 4083.04 (-0.55%) 02 December 2021

73 (20.80%) stocks advanced and 267 (76.07%) declined
0 stocks rose to a new 52-week high, 14 fell to new lows
47.58% of stocks closed above their 200-day average
8.83% of stocks closed above their 20-day average

Outperformers:

+ 13.46%-Auction Technology Group PLC (ATG.L)
+ 3.60%-Workspace Group PLC (WKP.L)
+ 2.59%-Essentra PLC (ESNT.L)

Underperformers:

-8.98%-Darktrace PLC (DARK.L)
-8.60%-AJ Bell PLC (AJBA.L)
-8.05%-Aston Martin Lagonda Global Holdings PLC (AML.L)

Up Next (Times in BST)

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

Open a Forex.com account, or log in if you’re already a customer.
Search for the pair you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels.
Place the trade.

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.