The greenback strengthened yesterday against the Yen and marked a three week high, as trade optimism continues to fuel the pair. US President Trump stated yesterday that China and the US are getting very close to a trade deal that may be announced within four weeks. However the markets attention could be turning towards the release of the US employment report for March, today at 12:30(GMT). The Non-Farm Payrolls figure is expected to rise and reach 180k if compared to prior figure of 20k, while at the same time the unemployment rate and the average earnings growth rate are expected to remain unchanged at 3.8% and +3.4% yoy respectively. Please note that after last month’s corrections on the NFP figure, we maintain some reservations about the final outcome of the indicator. Analysts seem to focus on the how strong the earnings component will be as it could boost consumption and cause a rebound in US yields. We would like to mention that should the actual rates and figures meet their respective forecasts, it would show a tight labor market in the US. Also such results would be indicative of the US economy being able to create new jobs while at the same time provide some indications for inflationary pressures in the US economy. USD/JPY continued its rise yesterday and during today’s Asian session, clearly breaking the 111.40 (S1) resistance level (now turned to support). We could see the pair remaining sensitive to safe have flows, as well as the US employment report later today. Should the bulls maintain control over the pair’s direction we could see it breaking the 112.00 (R1) resistance line. Should on the other hand the bears take over, we could see the pair breaking the 111.40 (S1) support line and aim for the 110.90 (S2) support barrier.

Saudi Arabia threatens to switch USD oil trades.

In an exclusive article, Reuters stated that Saudi Arabia considers the possibility of switching the USD for other currencies in oil trades, should the US congress pass a bill considering OPEC members as in breach of antitrust laws. Reuter’s sources have stated that the option had been discussed internally by senior Saudi energy officials and some went a step further stating that the plan had also been discussed with OPEC members. The bill which is wider known as NOPEC in the US, seems to have little chance of passing, yet the intense reaction by Riyadh is the element causing worries about oil prices stability and the USD. For the time being the markets seem unaffected by the news, however the “USD nuclear option” considered by the Saudis could have wider implications as also Iran and Russia may follow suit. WTI maintains a rather sideways motion over the past few days, testing the 62.00 (S1) support line, however being unable to successfully break it. To switch our bullish outlook for black gold’s prices though, we would require the commodity to clearly break the upward trendline incepted since mid-February. Should the market favor WTI’s long positions, we could see the commodity’s prices aiming if not breaking the 63.80 (R1) resistance line. On the other hand should oil come under the selling interest of the market, we could see WTI prices breaking below the 62.00 (S1) support line, the 60.85 (S2) support level and aim for the prementioned upward trendline.

Other economic highlights, today and early tomorrow

In today’s European session, we get Germany’s industrial output growth rate for February and later on the UK Halifax House Prices for March. In the American session we get Canada’s employment data for March as well as the US Baker Hughes oil rig count. During Monday’s Asian session we get Japan’s current account balance for February. As for speakers, Atlanta Fed president Bostic and ECB president Draghi are to speak.

USD/JPY H4

• Support: 111.40 (S1), 110.90 (S2), 110.30 (S3)
•Resistance: 112.00 (R1), 112.50 (R2), 113.20 (R3)

WTI H4

• Support: 62.00 (S1), 60.85 (S2), 59.00 (S3)
•Resistance: 63.80 (R1), 65.30 (R2), 66.50 (R3)