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The yellow metal broke out of the triangle pattern. The move was caused by the worse than forecast US employment data, which caused an all-out drop of the USD. The following surge ended at the resistance zone of the August high level at 1,830.00/1,835.00.

On Monday morning, the price had declined and found support in the 1,825.00 level.

If the price of the metal starts a decline, it could look for support in the 1,820.00 level, which previously provided resistance. Below the 1,820.00 level, the 55 and 100-hour simple moving averages might provide additional support.

On the other hand, a surge of the price most likely would test the resistance of the 1,830.00/1,835.00 zone before making an attempt to reach the 1,850.00 level.

The yellow metal broke out of the triangle pattern. The move was caused by the worse than forecast US employment data, which caused an all-out drop of the USD. The following surge ended at the resistance zone of the August high level at 1,830.00/1,835.00.

On Monday morning, the price had declined and found support in the 1,825.00 level.

If the price of the metal starts a decline, it could look for support in the 1,820.00 level, which previously provided resistance. Below the 1,820.00 level, the 55 and 100-hour simple moving averages might provide additional support.

On the other hand, a surge of the price most likely would test the resistance of the 1,830.00/1,835.00 zone before making an attempt to reach the 1,850.00 level.

Eurozone Sentix Investor Confidence dropped to 19.6 in September, down from 22.2, slightly below expectation of 19.7. That's the fourth decline in a row and the lowest reading since April, 2021. Current situation index was unchanged at 30.8. Expectations index dropped from1 4.0 to 9.0, lowest since May 2020.

Sentix said: "The momentum of the global economy is slowing. The expectation scores of most regions in the sentix business cycle indices are falling for the fourth or fifth time in a row. The expectation values are still positive, but the zenith of the economic recovery since the lockdowns last autumn has been passed. This is also evident in the assessments of the economic situation, which have only improved slightly in a few regions. In the important region of Asia ex Japan, on the other hand, we measure a noticeable decline".

Full release here.

UK PMI Construction dropped to 55.2 in August, down from July's 58.7, below expectation of 56.9. Markit said new order growth eased to a five-month low. All three monitored segments recorded softer rise in activity. But rise in input prices was second-fastest amid severe supply chain disruption.

Usamah Bhatti, Economist at IHS Markit: "Evidence that the UK construction sector began to feel the impact of ongoing supply chain disruption was widespread midway through the third quarter of 2021. Growth rates for overall activity as well as the three monitored subsectors eased further from the recent highs earlier in the summer. Similarly, new business inflows have continued to increase at a marked pace, yet even here the rate of growth has eased to a five-month low.

Full release here.

Oil slumps in Asia

On Friday, oil prices retreated after the soft Non-Farm Payrolls as investors fretted that the economic recovery was faltering, thereby reducing consumption. Brent crude fell 0.50% to USD 72.40, and WTI fell 0.80% to USD 769.20 a barrel.

The sombre mood has continued in Asia after Saudi Arabia cut prices by USD 1.00 dollar a barrel to Asian customers. Saudi Arabia was expected to cut prices to Asian customers today, but the cut was higher than expected. That has seen Brent crude and WTI retreat by another 0.95% to USD 71.75 and USD 86.55 a barrel, respectively, this morning.

Given that OPEC+ is continuing its plan to raise production monthly, despite weak data from China and the US raising slowdown fears, and Saudi Arabia looking for market share in the region, oil is likely to remain under pressure. This week, the data calendar is relatively thin of tier-1 releases globally, meaning sentiment will drive market moves.

That should keep oil offered on rallies with resistance on Brent crude at USD 72.50 and USD 73.70 a barrel. A fall through the 100-DMA at USD 71.15 a barrel signals a retest of USD 70.50 and USD 70.00 a barrel. Things could get ugly below USD 70.00 a barrel. WTI has resistance at USD 70.50 a barrel and is testing its 100-DMA support at USD 68.60 this morning. Thinned liquidity could see support at USD 67.00 a barrel threatened.

Gold still looks unimpressive

A lower US dollar and easing US yields post-payrolls lifted gold prices on Friday. Gold finished the session 1.0% higher at USD 1828.00 an ounce, easing to USD 1826.00 in a moribund Asian session.

The rally on Friday was unimpressive, despite the headline figure. The Non-Farm Payrolls miss was a ripe environment for gold to stage a powerful rally as Fed tapering fears were swept off the table. Instead, all gold could manage was a modest rally that never threatened the major resistance zone lying just above between USD 1830.00 and USD 1834.00 an ounce.

Although a daily close above USD 1835.00 an ounce clears the technical picture for a move to USD 1900.00, gold appears to be running out of time to do so. The price action on Friday reinforces that gold’s upward momentum is waning.

Gold investors must now hope that US traders return to the office tomorrow and start selling US dollars meaningfully to keep hopes of higher prices alive. If gold falls through support bounded by the 100 and 200-DMAs at USD 1815.50 and USD 1809.50 an ounce, gold could fall to USD 1780.00 an ounce.

US dollar claws back losses from soft NFP

The US dollar fell on Friday after an ultra-soft Non-Farm Payrolls print, but not markedly so. The dollar index reclaimed most of its intraday losses to finish just 0.11% at 92.12. These losses have reversed this morning, with the index creeping 0.10% higher to 92.20, leaving the index effectively unchanged post-payroll.

A US holiday today is sapping liquidity and almost certainly had a similar effect Friday, limiting losses. However, the fall in unemployment to 5.20%, and data indicating rising wages and swaths of unfilled jobs, could have taken the edge of the Non-Farm shock.

EUR/USD probed 1.1900 on Friday but retreated by the session's end to be unchanged at 1.1880, easing to 1.1868 in dull Asian trading. EUR/USD has now formed a triple top at 1.1910, and although dips to 1.1850 should be supported, EUR/USD has wood to chop at 1.1910 before we can talk about a return to 1.2000+. GBP/USD closed at 1.3870, having probed 1.3900 post payrolls. GBP/USD should find support on dips to its 50-day and 200-day moving average (DMA) around 1.3810. The 1.3980/1.4000 area remains the key resistance region.

AUD/USD and NZD/USD powered 0.60% higher on Friday before retreating by 0.30% and 0.15% to 0.7435 and 0.7140 this morning. Until the US returns tomorrow, AUD/USD looks likely to trade in a 0.7400 to 0.7500 range. Cases in New Zealand fell to 20 today for the second day in a row, suggesting the country is on track for a fast reopening. That will support Kiwi on dips to 0.7100, leaving it on track to rise to 0.7300 later this week.

USD/CNY fixed at 6.4529 today, right on expectations. Somewhat surprisingly, the PBOC net-drained liquidity at the repo, although US strength generally has seen USD/CNY drift higher to 6.4545. The fixes will take greater importance going forward, with a significant deviation from the norm potentially signalling more China easing measures are on the way.

USD/Asia is mixed this morning, with liquidity impacted by the US holiday. The US Non-Farms data will take the Fed taper pressure of regional currencies, for now, allowing them to continue the V-shaped recovery of the past two weeks. The Non-Farms miss should greenlight an increase in appetites by international investors for ASEAN equities once again, and potentially some carry trades. That should be supportive for regional currencies this week.

Overall, the price action is rather less US dollar downbeat than I would have surmised after the US employment data on Friday. Part of that is due to the US holiday, I am sure. I would prefer to wait until the US returns tomorrow to form a stronger opinion, but given the scale of the downside miss, it is hard to see the dollar rallying this week. If anything, the downside is the greater risk.

Receding Fed taper boosts Asian heavyweights

Friday's US employment data substantially lowered the risks of a Fed taper this year, which is playing out well in Asian equity markets this morning. Wall Street had a non-descript finish on Friday despite the huge downside miss by the US data, with a long weekend appearing foremost in US investors' minds. The S&P 500 finished almost unchanged at 0.03% higher; the Nasdaq rose by 0.21%, while the Dow Jones retreated by 0.21%. US futures are practically unchanged, with US OTC markets closed today.

In Asia, receding tapering fears and rising expectations of stimulus locally after soft data last week has lifted Japan and China markets, in particular. The Nikkei 225 is still experiencing a post-Suga rush, leaping 1.60% higher as local investors expect a pre-election fiscal tap opening. The Kospi is having a sedate start, though, rising just 0.10%.

Similarly, the soft China data last week has lifted hopes of an earlier RRR cut as well as more central government largesse. That has sent the Shanghai Composite soaring by 1.25%, the CSI 300 by 1.65%, and the Hang Seng by 0.45%. After some torrid sessions recently, led by governmental sectorial clampdowns, it appears that bargain hunters are out in force today in mainland equities.

Singapore has risen by 0.20% this morning, and Taipei by 0.12%. Kuala Lumpur has retreated by 0.55% as oil prices come under pressure once again. Bangkok is just 0.10% lower, despite the government surviving a non-confidence vote over the weekend. Jakarta has fallen 0.35%, with Manila down 0.25%.

Australian markets have retreated today after large-cap heavyweights went ex-dividend and Covid-19 cases continued climbing in New South Wales and Victoria. They have, however, reclaimed part of their early losses suggesting that today's sell-off is not the start of a broader movement. A suitably dovish RBA tomorrow should restore business as usual. The ASX 200 has fallen by 0.50%, while the All Ordinaries has retreated by 0.65%.

Although Europe's eyes will be on German data and the ECB this week, the soft payroll data from Friday should lift European equities into the green today, with a Fed tapering having been dealt a severe blow.

The EUR/USD is at important resistance. We could see a drop if the price doesn’t break 1910.

Historical patterns show good candlestick configuration for taking shorts. Look for rejections around M H3 1860-70. If the price stays bearish we should be seeing a good drop towards 1.1800 and 1.1750. The final target is 1.1700 where the price might be bought. However, as this is a counter trend trade, watch for 1.1800 first.

Daily Pivots: (S1) 151.79; (P) 152.04; (R1) 152.30; More...

With 151.32 minor support intact, intraday bias in GBP/JPY stays mildly on the upside for 153.42 resistance first. Decisive break there will argue that whole corrective pattern from 156.05 has completed, and bring retest of this high. On the downside, however, break of 151.32 minor support will turn bias back to the downside for 149.16 support instead.

In the bigger picture, rise from 123.94 is seen as the third leg of the pattern from 122.75 (2016 low). As long as 149.03 support holds, such rise would still resume at a later stage. However, sustained break of 149.03 support will indicate rejection by 156.59. Fall from 156.05 would be at least correcting the whole rise from 123.94. Deeper fall would be seen back 38.2% retracement of 123.94 to 156.05 at 143.78 first.

Daily Pivots: (S1) 130.08; (P) 130.41; (R1) 130.64; More....

Intraday bias in EUR/JPY remains neutral for some consolidations, but further rise is expected with 129.14 minor support intact. Corrective fall from 134.11 could have completed at 127.91 already. On the upside, break of 130.73 will resume the rebound from 127.91 to 132.68 resistance next. However, break of 129.14 will dampen this bullish view and bring retest of 127.91 low instead.

In the bigger picture, rise from 114.42 is seen as a medium term rising leg inside a long term sideway pattern. As long as 127.07 resistance turned support holds, further rise is still expected to retest 137.49 (2018 high). However, firm break of 127.07 will argue that the medium term trend has reversed, deeper fall would be seen to 61.8% retracement of 114.42 to 134.11 at 121.94.