US Jobs Report Leads To Moderate Risk Taking

Higher-yielding assets, including the euro, Australian dollar and crude oil, saw modest gains on Friday afternoon, following a positive US jobs report that led to risk taking among investors. This week, traders will want to pay attention to several potentially significant economic indicators out of both the eurozone and US. Specifically, Tuesday's EU Retail Sales figure, Wednesday's US Crude Oil Inventories, Thursday's EU Minimum Bid Rate and ECB Press Conference, and Friday's US Trade Balance report all have the potential to create volatility in the marketplace.

Economic News

USD - Dollar Turns Bearish Following NFP Report
The safe-haven US dollar took losses during the second half of the day on Friday, following a positive nonfarm payrolls report which signaled moderate progress in the US economic recovery and led to risk taking among investors. Against the Swiss franc, the greenback fell close to 70 pips after the employment statistic was released and eventually closed out the week at 0.9246. The AUD/USD advanced more than 90 pips during afternoon and evening trading before finishing out the day at 1.0478.

This week, the main pieces of US news are likely to be Thursday's Unemployment Claims figure, followed by Friday's Trade Balance report. If either indicator shows improvements in the US economy, investor risk taking may lead to further losses for the greenback. In addition, traders will want to pay attention to news regarding the US debt ceiling.

The US government is expected to run out of money in the next two months if the debt ceiling is not raised, which would allow more money to be borrowed. If lawmakers fail to reach a deal to raise the debt ceiling, risk aversion is likely to boost safe-haven assets.

EUR - ECB Press Conference Set to Generate Market Volatility This Week
The euro saw upward movement against its safe-haven currency rivals on Friday afternoon, following a slightly better than expected US jobs report which led to risk taking in the marketplace. Against the US dollar, the common currency gained close to 90 pips during the second half of the day, eventually peaking at 1.3088 before finishing out the week at 1.3069. The EUR/JPY gained some 140 pips over the course of the day before finishing out the week at 115.21.

The main piece of eurozone news this week is likely to be the Minimum Bid Rate and ECB Press Conference on Thursday. While analysts are not expecting the European Central Bank to adjust interest rates, the press conference will provide an opportunity for EU officials to discuss the state of the economic recovery in the region. Any signs that the EU will remain in recession for the near future are likely to weigh down on the common-currency during the second half of the week.

Gold - Gold Reverses Losses to Close out Week
After falling by more than $20 an ounce during early morning trading on Friday, gold was able to bounce back during the afternoon session after a US jobs report turned the USD bearish, making the precious metal cheaper for international buyers. Gold advanced more than $30 during the second half of the day, eventually finishing out the week at $1655.88.

This week, gold traders will want to pay attention to any developments regarding the US debt ceiling. Unless lawmakers can reach a deal in the near future to raise the debt ceiling, the US government will run out of money. Any positive developments to raise the ceiling will likely lead to risk taking in the marketplace, which would give gold an additional boost.

Crude Oil - Oil Prices Increase Following US Jobs Report
The price of crude oil gained close to $1.70 a barrel on Friday afternoon, after a better than expected US jobs report led to risk taking in the marketplace. The jobs data also led to speculations that demand for oil in the US will go up, which made the commodity more favorable for investors. Crude finished out the week at $93.06.

This week, oil traders will want to monitor eurozone news. If Tuesday's Retail Sales figure or Thursday's ECB Press Conference signal economic growth in the EU, investors may shift their funds to higher-yielding assets which would lead to further gains in oil prices.

Technical News

EUR/USD
The Bollinger Bands on the weekly chart are beginning to narrow, indicating that a price shift could occur in the coming days. Furthermore, the MACD/OsMA on the same chart appears close to forming a bearish cross, signaling that the shift in price could be downward. Opening short positions may be the smart choice for this pair.

GBP/USD
The daily chart's Slow Stochastic appears close to forming a bullish cross, indicating that this pair could see upward movement in the near future. Additionally, the Williams Percent Range on the same chart has dropped into oversold territory. Traders may want to open long positions for this pair ahead of a possible upward correction.

USD/JPY
The Relative Strength Index on the weekly chart is currently in overbought territory, indicating that a downward correction could occur in the coming days. This theory is supported by the Slow Stochastic on the same chart, which has formed a bearish cross. Opening short positions may be the smart move for this pair.

USD/CHF
The Williams Percent Range on the daily chart has crossed into overbought territory, indicating that a downward correction could occur in the near future. Furthermore, the Slow Stochastic on the same chart has formed a bearish cross. Opening short positions may be the smart move for this pair.

The Wild Card

CAD/JPY
Both the Relative Strength Index and Williams Percent Range on the daily chart are in overbought territory, indicating that a downward correction could occur in the near future. Furthermore, the MACD/OsMA on the 8-hour chart has formed a bearish cross. This may be a good time for forex traders to open short positions ahead of possible downward movement.