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Yellen sends markets lower!

NFP Wall Street Technical Analysis


Renewed fears of a “hyperinflation” dystopia have the U.S economy on edge ahead of the U.S Non-Farm Payrolls (NFP) report this Friday the 7th of May 2021 around 14:30 SAST.

Even though the U.S economy isn’t even close to a hyperinflation scenario, market participants have been on edge due to inflation concerns which could spark rate hikes earlier than anticipated. These fears were amplified on Tuesday as “U.S. Treasury Secretary Janet Yellen said rate hikes may be needed to stop the economy overheating.” - Reuters

Profit-taking was high on the agenda after Yellen’s remarks which sent the Nasdaq lower by 1.9% which was curbed slightly by Asian holidays. Commodities are back in favour with copper reaching new highs and Crude Oil regains a seven-week high as countries open borders.

Here is what’s expected this week:



The U.S Non-Farm Payrolls (NFP) 

The U.S jobs sector comes back into focus this week after a solid increase over the last month which has prompted some analyst to call for U.S payrolls to rise by a million jobs.


Jobs number:

The number of new Non-Farm jobs for the month of April is expected to come in slightly higher than the previous reading for Mach 2021 at 916K. 

  • One million new jobs could be added to the payrolls this Friday but overall, the U.S Non-Farm Payrolls data is expected to increase to 980K employed for the month of April 2021. 


Hourly earnings:

The Average hourly earnings (M/M) (Apr) data is expected to increase to 0.1% while the Average hourly earnings (Y/Y) (Apr) is also expected to decline to -0.4% from the previous month's number.


U.S. Unemployment Rate:

The U.S. Unemployment Rate measures the percentage of the total workforce that is unemployed and actively seeking employment during the previous month.

The U.S. Unemployment Rate is watched closely for signs of economic recovery and is expected to decrease to 5.8%. 


Why is the jobs number important?

The Non-Farm Payrolls report (NFP) is treated as an economic indicator for people employed during the previous month, and the number being released will have a direct impact on the markets. In the United States, consumer spending accounts for most of the economic activity, and the Non-Farm Payrolls report represents 80% of the U.S. workforce. Farmers are excluded from the employment figures due to the seasonality in farm jobs. 


The Wall Street 30 Technical Analysis

The Wall Street 30 (WS30) price action has remained in a consolidated state over the last week with the 34237-resistance level in focus for a breakout. As mentioned in our previous WS30 note the support and resistance levels have been watched for breakouts that did not come to fruition.

If the U.S economic situation remains stable, then we might see a breakout to new highs which has prompted me to add a new possible target price at 34994 over the short term. All other levels of interest remain in place until we see a breakout with a throwback of the 34237-resistance level.

  • The price action is testing the resistance level at 34237 which is still holding. We have raised our new possible target price to 34994 over the short term.
  • The 50-day SMA (blue line) is supporting the price action higher on the 4H chart.
  • The Relative Strength Index (RSI) is above the 50-mark and is pointing higher.


Wall Street 30H4[14]

Chart Source: Wall Street 4H Timeframe  - GT247 MT5 Trading Platform


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Trading term of the day


Hyperinflation is a term to describe rapid, excessive, and out-of-control general price increases in an economy. While inflation is a measure of the pace of rising prices for goods and services, hyperinflation is rapidly rising inflation, typically measuring more than 50% per month. Although hyperinflation is a rare event for developed economies, it has occurred many times throughout history in countries such as China, Germany, Russia, Hungary, and Argentina. - Investopedia


Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 5th of May 2021) U.S Market open.

Sources – MetaTrader5, Reuters, Investopedia




Barry Dumas - Round-1

Barry Dumas | Market Analyst at GT247.com

Barry has 12 years experience in the financial markets. He enjoys educating clients on trading / investing and providing punchy technical analysis on securities. He currently holds a Wealth Management qualification and is studying towards becoming a Chartered Market Technician® (CMT) designation holder.



Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by Barry Dumas, Market Analyst at GT247 (Pty) Ltd t/a GT247.com (“GT247.com”) as general market commentary, and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. GT247.com does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information which we receive from third party data providers. You must rely solely upon your own judgment in all aspects of your trading decisions and all trades are made at your own risk. GT247.com and any of its employees will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.