Forex news for July 9, 2016
- S&P ends the session near highs and near all time high close
- CFTC commitment of traders: JPY longs increase. EUR shorts increase.
- US Consumer credit above expectations at 18.558B vs 16B est
- Sell any GBP bounce ahead of the BOE - BAML
- A thin and broad brush look at the EURUSD
- Baker Hughes US oil rig count 351 vs 341 prior
- Juncker: I bet on a Brexit
- EUR/USD will head lower, slowly -- SocGen
- JPMorgan frets on US autosales slump
- S&P 500 climbs to the highest in 11 months: Three reasons why
- Mark Carney working on his post-Brexit plan
- This will be a technical trade to watch in the week ahead
- Life after Brexit - UK starts fresh trade talks with India
- Hilsenrath: Jobs numbers increase the odds of a rate move as early as September
- Lowest paying sectors were the big employers in non-farm payrolls report
- Furman says the June jobs report is "a clear indication that the US economy continues to make solid progress"
- Kazakhstan central bank touts its Brexit trading skill
- Dollar gives up gains... USDJPY back below 50% level.
- IMF downgrades growth in Eurozone due to Brexit
- The dollar rallies after the big move higher in NFP
- June 2016 Canadian net employment change -0.7k vs 5.0k exp
- US June 2016 nonfarm payrolls +287K vs +180K expected
- PBOC says downward pressure on Chinese economy still exists
Today was all about the US employment report. Overall, the nonfarm payroll increase by 287K versus 18K expected. The prior month was revised lower from 38K to 11K. Overall, the two-month revision was minus 6K and the average over 3 months was 147.33 - weaker than the 2015 average of 228K. The average for the first six months of 2016 is 171.5K.
The unemployment rate moved up to 4.9% from 4.7%. The labor participation rate moved to 62.7% from 62.6%. Average hourly earnings disappointed at +0.1% versus 0.2% expected and 2.6% year on year (versus 2.7% expected).
The market initially pushed the dollar sharply higher, but those gains were erased in most currency pairs as the market started to focus on the relative strength versus 2015 - as well as where the jobs were created. The biggest sector where jobs were added were in the hospitality and leisure sector. Those are not exactly high paying jobs although they do imply that the more fortunate are going out and having a good time. Regardless of the reasons for the price action, the overall tone of the day saw the US dollar trading mixed.
For the EURUSD, after an hour of down up and down activity, the pair settled below the 50% midpoint of the days range at the 1.1060 level but above support at the 1.1023 – 27 area. It is ending the day at around 1.1050 which is only about 10 down on the day. For the week the EURUSD closed a week ago at 1.1128. So overall, a down week for the pair and an up week for the USD.
The GBPUSD's initial plunge lower held support against a lower trend line at 1.2903. The subsequent rally took the price close to the 100 hour moving average where sellers capped the topside. The 100 hour moving average will be eyed in trading next week. It currently trades at the 1.3006 level. The price has not traded above that moving average since June 30. The aforementioned trend line near the 1.2900 area define the close trading support and resistance into the new trading week. Look for the break and run.
The USDJPY was another currency that tested the 100 hour moving average. In the case of the USDJPY, the 100 hour moving average came in at 101.33. The high price extended to 101.26 soon after the release of the employment numbers. After a plunge back lower, that saw the pair test 100.00, the pair settled between 100.40 and 100.87. The CFTC commitment of traders report continues to show net JPY long positions. Do the traders know something? or are they getting offsides?
The dollar was down sharply against the NZD and AUD. Both saw big dips on the release, followed by bigger rallies. Each closed near the high levels of the day - perhaps influenced by a stronger stock market.
Finally, in Canada, employment came out weaker than expectations and that helped to pushed the USDCAD higher and toward trend line resistance at the 1.3094 level. That trend line held and the pair rotated back down. It did end up closing above the 100 day moving average for the first time since February 24, 2016. That moving average currently comes in at 1.3006. Staying above will keep the buyers in control in the new trading week but they will need to push the price above that trend line at the 1.3094 level.
Global stock market indices were mixed with gains in the US and loses elsewhere. The UK eked out a small gain for the week.
In the commodity markets this week. energy products were sharply lower with Crude oil down -9.28% on the week (amazing how it swings around). Gold ends up 1.85%. Silver outperformed at up 8.38%. (see table below).
