Weak US jobs data soured dollar’s sentiment and increased risk of Fed rate cut

The US dollar fell sharply across the board on disappointing US jobs data on Friday.
Non-farm payrolls showed only 75K new jobs in May (the lowest since Feb) vs promising 185K consensus and downward-revised April’s figure at 224K.
The data came in line with signals from Wednesday’s ADP private sector jobs data (May 24K vs 180K f/c) which is often seen as indication for more significant NFP data.
Average hourly earnings also fell below consensus in May (m/m 0.2% vs 0.3% f/c; y/y 3.1% vs 3.2% f/c), while unemployment rate remained unchanged and in line with forecast at 3.6% in May.

Significantly weaker than expected US labor sector data sent the greenback lower, boosting its major counterparts for probe through important barriers.
Weak data further soured dollar’s sentiment and increased chances for Fed rate cut that was already signaled by dovish comments from top Fed officials earlier this week, which could happen as early as 19 June, when FOMC policy meeting is scheduled.

The Euro surged through pivotal resistances at 1.1277/84, with close above these levels to signal stronger recovery, as the pair is on track for the biggest weekly gains since mid-Aug 2018.

British pound rose through 20SMA on weaker dollar and cracked important barriers at 1.2740/50 zone, close above which would generate bullish signal.

The dollar dipped below 108 handle against Japanese yen and threatened of retest of key support at 107.81, signaling an end of near-term consolidative / corrective phase from 107.81, which was capped at 108.62 by pivotal Fibo barrier.

The Aussie dollar probed again through key barriers at 0.6990/0.7000, following triple failure at these levels this week.

Spot gold reacted positively on signals of US interest rate cut and extended uninterrupted seven-day advance ticks ahead of key resistance at $1346 (2019 high, posted on 20 Feb).
Eventual break here would generate strong bullish signal for continuation of larger uptrend from 2018 low at $1160, towards targets at $1365/66.