Asian stocks are trading on positive foot recovering from early losses on profit-taking ahead of NFP report later on the day. Asian markets rallied during the week on recovery hopes after the coronavirus crisis. Wall Street finished mixed yesterday after the US initial jobless claims dropped to 1.877 million from 2.126 million but came above the consensus estimates of 1.833 million for the week ending May 30. The continuing claims rose to 21.49 million for the week of May 23 also above the expectations of a second drop to 20 million. United States Nonfarm Productivity came in at -0.9%, topping the expectations of -2.7% in the first quarter of 2020.
US Nonfarm Payrolls NFP Will Drive Markets
The US Nonfarm Payrolls (NFP) for May, expected at -8 million from -20,5 million previous reading. The US Unemployment Rate, expected at 19.8% above the 14.7% previous reading.
Investors sentiment boosted after the European Central Bank added 600 billion Euro to its Pandemic Emergency Purchase Program above the market expectations. The ECB forecasts that GDP growth will contract 8.7% in 2020, and would recover to pre-coronavirus levels in 2023.
The ASX 200 is 0.37% higher at 6,014 rebounding from morning losses and making fresh three month highs after five consecutive sessions with gains.
The Nikkei 225 finished 0.74% higher at 22,863. The Hang Seng Index is 0.67% higher at 24,527. The Shanghai Composite index is 0.21% higher at 2,925. The Singapore Straits Times index is 1.00% higher at 2,734.
Crude oil price continues the rally. WTI crude oil is 0.84% higher at 37.63 per barrel, while the Brent crude oil broke again above the $40 mark and is 1.10% higher at $40.36.
AUDUSD trades higher for the seventh consecutive session after the Australia AiG Performance of Services Index came up to 31.6 in May from previous 27.1. AUDUSD has gained over 24% from the March lows despite the Aussie economy slipped into recession. The rebound in the Chinese economy after the coronavirus and higher iron ore prices Australia’s main export product support AUD.
On the technical side, the technical picture for AUDUSD is bullish as the pair makes consecutive higher highs and higher lows. The RSI index is in the overbought area, and a sharp correction can’t be ruled out.
On the upside, initial resistance for AUDUSD stands at 0.7004 the daily top. Next hurdle will be met at 0.7025 the high from December 31, 2019.
On the flip side, the first support for AUDUSD stands at 0.6931 the daily low. Below 0.6931 the next target will be at 0.6870 the low from yesterday’s trading session. Next support area would emerge at 0.6768 the low from June 2.