Dollar Surges on Solid Non-Farm Payroll

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Dollar Surges on Solid Non-Farm Payroll

Author: admin | Total views: 414 | Word Count: 434 | Category: Foreign Exchange | Date: Jul 19th 2008

Dollar rises strongly in early US session after a better-than-expected Non-Farm Payroll report which shows US economy added 167k jobs in Dec, comparing to consensus expectation of 100k. Nov's job growth was also revised upward from 132k to 154k. Unemployment rate remains at 4.5%. These data is showing that the US job market is still resilient. Also, avg hourly earnings increased 0.5% mom, 4.5% yoy, above expectation of 0.3% mom and 3.9% yoy. This is suggesting that wage pressure, which is one of Fed's inflation concerns, is still there.

Earlier today, reactions to Eurozone data were muted despite much weaker than expected retail sales data which increased 0.1% mom, 0.5% yoy in Nov versus expectation of 0.5% and 1.5%. PPI and unemployment rate were inline with expectation. Meanwhile, Both Business climate and consumer sentiment were slightly better than consensus in Dec.

Canadian dollar rebounds earlier today after better than expected employment report which shows that Canadian economy added an estimated 62k jobs in Dec, up from 22 during the prior month. This led to a decline in the unemployment rate by -0.2% points to 6.1%.

EUR/USD's recovery from 1.3060 failed to break above mentioned 1.3116 resistance and fall from 1.3296 resumes in early US session by reaching below 1.3 level. Break of 1.3051 support will bring further decline to 100% projection of 1.3362 to 1.3051 from 1.3296 at 1.2985 or lower.

As discussed before, attention will be paid to 1.2922/23 cluster support (50% retracement of 1.2483 to 1.3362 at 1.2923) and bring rally resumption. The price actions from 1.3362 is still treated as consolidation to rise from 1.2483 only as long as this cluster support holds. But a break above 1.3106 resistance is needed to indicate a short term bottom is formed first. Otherwise short term risk remains on the downside. Also, sustained break of 1.2922/23 will seriously dampen this case and should bring further decline towards 1.2760 support.

In the bigger picture, EUR/USD's medium term up trend from 1.1639 (06 low) is still in force and is expected to continue towards 1.3668 (04 high) and probably further to 100% projection of 1.1639 to 1.2978 from 1.2483 at 1.3822. However, as it's unclear whether this rally from 1.1639 represents resumption of multi-year up trend from 0.8223 or just part of a large scale consolidation that started at 1.3668, close attention will be paid to loss of upside momentum and reversal pattern formation as EUR/USD approaches 1.3668 and then 1.3822. On the downside, break of 1.2760 support will turn medium term outlook neutral and argue that whole medium term rally from 1.1639 has possibly completed.

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Dollar rises strongly in early US session after a better-than-expected Non-Farm Payroll report which shows US economy added 167k jobs in Dec, comparing to consensus expectation of 100k. Nov's job growth was also revised upward from 132k to 154k. Unemployment rate remains at 4.5%. These data is showing that the US job market is still resilient. Also, avg hourly earnings increased 0.5% mom, 4.5% yoy, above expectation of 0.3% mom and 3.9% yoy. This is suggesting that wage pressure, which is one of Fed's inflation concerns, is still there. 
Earlier today, reactions to Eurozone data were muted despite much weaker than expected retail sales data which increased 0.1% mom, 0.5% yoy in Nov versus expectation of 0.5% and 1.5%. PPI and unemployment rate were inline with expectation. Meanwhile, Both Business climate and consumer sentiment were slightly better than consensus in Dec. 
Canadian dollar rebounds earlier today after better than expected employment report which shows that Canadian economy added an estimated 62k jobs in Dec, up from 22 during the prior month. This led to a decline in the unemployment rate by -0.2% points to 6.1%. 
EUR/USD's recovery from 1.3060 failed to break above mentioned 1.3116 resistance and fall from 1.3296 resumes in early US session by reaching below 1.3 level. Break of 1.3051 support will bring further decline to 100% projection of 1.3362 to 1.3051 from 1.3296 at 1.2985 or lower. 
As discussed before, attention will be paid to 1.2922/23 cluster support (50% retracement of 1.2483 to 1.3362 at 1.2923) and bring rally resumption. The price actions from 1.3362 is still treated as consolidation to rise from 1.2483 only as long as this cluster support holds. But a break above 1.3106 resistance is needed to indicate a short term bottom is formed first. Otherwise short term risk remains on the downside. Also, sustained break of 1.2922/23 will seriously dampen this case and should bring further decline towards 1.2760 support. 
In the bigger picture, EUR/USD's medium term up trend from 1.1639 (06 low) is still in force and is expected to continue towards 1.3668 (04 high) and probably further to 100% projection of 1.1639 to 1.2978 from 1.2483 at 1.3822. However, as it's unclear whether this rally from 1.1639 represents resumption of multi-year up trend from 0.8223 or just part of a large scale consolidation that started at 1.3668, close attention will be paid to loss of upside momentum and reversal pattern formation as EUR/USD approaches 1.3668 and then 1.3822. On the downside, break of 1.2760 support will turn medium term outlook neutral and argue that whole medium term rally from 1.1639 has possibly completed. Article Source: <a href="http://www.easyforexstrategy.com" target="_blank">Easy Forex Strategy</a> About the Author: Secret Sebastian
Professional Forex Trader
<a href="http://www.learnforexsecret.com/">Learn Forex Trading</a>