Non-Farm Payrolls (NFP), Bitcoin (BTC) & S&P 500 (SPX) – FinTwit Trends to Watch

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FINTWIT ANALYSIS

  • Mixed U.S. jobs data.
  • Bitcoin (BTC) rallying.
  • SPX takes a breather.

U.S. JOBS UNDERSHOOTS, UNEMPLOYMENT FALLS WHILE WAGES RISE

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Non-Farm Payrolls (NFP) and U.S. unemployment data were released on Friday with keen eyes from financial market participants. NFP’s came in significantly lower than estimates (see calendar below).

DailyFX econ calendar

A lower figure was expected as COVID-19 hindered jobs growth in August however, the actual 235K print was the lowest since January 2021. This being said, the unemployment rate did drop to 5.2% (in line with forecasts) while wage numbers rose due to the reduced labour force. Positives can be taken from this data for both accommodative and restrictive camps respectively however, on this occasion I believe the doves may take the win. The Federal Reserve will likely maintain its course and begin tapering towards the latter part of 2021 despite this weaker than expected NFP announcement. Long-end U.S. Treasury yields propped up steepening the curve (see chart comparison below).

U.S. 10-YEAR TREASURY YIELDS VS NFP:

US 10 year vs NFP

Chart prepared by Warren Venketas, Refinitiv

CRYPTOCURRENCIES FOLLOW BITCOIN (BTC) AS IT BREAKS ABOVE $50,000

BTC continues its bull run after poor U.S. jobs data hurts the dollar. The psychological$50,000 resistance level has been breached for the first time since May 2021 and could persist to $55,000 should we see a daily close above $50,000. The bullish environment for cryptos will surely remain in the near-term as markets await further economic data stimuli.

BITCOIN (BTC/USD) DAILY CHART

BTC daily chart

Chart prepared by Warren Venketas, IG

Key resistance levels:

  • $55000
  • $51103

Key support levels:

  • $50000
  • $45000

NFP HALTS S&P 500 INDEX (SPX) BULL RUN

SPX opened marginally lower on Friday as profit taking likely ensued on the back of a slowing jobs recovery. All sectors were trading lower with only energy faintly in the green (see sector summary below). The flip side to this argument is that Fed tapering won’t be brought forward from pressure by dovish officials and asset purchases will persist thus buoying U.S. stocks.

SPX sector summary

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S&P 500 INDEX (SPX) DAILY CHART

S&P500 Daily Chart

Chart prepared by Warren Venketas, IG

The daily SPX chart above shows resistance at the 4550.00 key horizontal level. Downward pressure could endure with bears eyeing the 4500.00 psychological handle while the Relative Strength Index (RSI) is growing its bearish bias as divergence (red) expands. Threatening bearish divergence is on the horizon but the NFP report may not be enough to spark the downturn just yet. More guidance by policy makers and COVID-19 is required before a directional bias can be established.

— Written by Warren Venketas for DailyFX.com

Contact and follow Warren on Twitter: @WVenketas

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