Forexlive Americas FX news wrap: US and Canada show decent employment gains.

Forex news for trading on July 7, 2017

In other markets, the end of day snap shot shows:

US stocks cheered more jobs and contained wages. The Nasdaq led the way with gains of 1.04%. The S&P rose by 0.64%. The Dow rose by 0.44%
US yields rose but traded in a narrow range. 2 year 1.399%, unchanged. 5 year 1.947%, +1.1 bp. 10 year 2.3838, +1.8 bp. 30 year 2.927%, +2.5 bp.
Gold tumbles by $12.12 to 1213.15
WTI crude oil also tumbled by -$1.19 or -2.61% to $44.33.

Below is a snap shot of the closing changes for the major currencies vs each other.

The CAD was the runaway favorite. The better than expected employment data (+45.3K net change in employment) out of Canada paves the way for the Bank of Canada to take away some of insurance eases from 2015. The BOC cut rates from 0.75% to 0.50% in July 2015. In January 2015 they also cut by 0.25% (from 1.00% to 0.75%). The BOC meets on Wednesday and are expected to take back one of those easings.

Technically, the USDCAD this week fell below the 1.3000-18 area (see yellow area and red circles in the chart below). That level has been home to a number of key swing lows going back to July 2016. The move below this week - and staying below - is more bearish. Targets include the lows from 2016 at 1.28207, 1.2762 and 1.2665. Stay below the 1.3000-1.3018 level keeps the sellers in control.

While the USDCAD was benefiting from the better employment data, the USD got a smaller bump higher from its employment data. As a review:

NFP rose by 222K vs 178k estimate
The 2 month revisions added 47K
The average weekly hours increased to 34.5 vs 34.4 est./last

The "market" at first were luke warm on the average hourly earnings which rose by 0.2% MoM vs 0.3% estimate. The unemployment rate also moved higher to 4.4% from 4.3% but that is because more people re-entered the workplace. So although there was a luke warm reception to the data today, I will take 222K +47K jobs and 0.2% earnings growth. The dollar should benefit, but it does not have to. Hence the look at the technicals

What are the technicals saying for some of the other currency pairs as we end the week and look to the new week?

The EURUSD for the 2nd week in a row, stalled in the key resistance area defined by swing highs between 1.1435 and 1.1465 (see red circles in the chart below). The high today reached 1.1439 and started to fall back down. The high last week reached 1.1445 and rotated to a low of 1.1311. Now, the low at 1.1311 was early buyers against the 1.1300 level. That was the high price after the November US election. The 1.1282 is home to other swing levels. The low today could only get to 1.1379 and it is closing at 1.1395. If this pair's high is in place after the twin peaks over the last two weeks in a key resistance area, there needs to be moves below the 1.1365 high from August 2016, the 1.1326 high from September 2016 and then the 1.1282-1.1300 level. The 50% of the days range today is at 1.1409. That is where the corrective high stalled today. Use that as a close stop for shorts.

This week the USDJPY moved above a trend line on Monday on the daily chart. That is bullish. The price also moved above the 50% of the 2017 range at 113.36. That level is a risk level for longs. On the topside, the 114.367 is the high from May and the 61.8% of the 2017 range is at 114.598. That is the next targets to get above to keep the bull run going. Above that the March high at 115.50 will be tested.

What is concerning about the long at these levels is that the pair failed on the break above a topside trend line on the hourly chart. That says we could see a rotation down to the the 113.46 area where you could get trend line, 100 hour MA and old swing levels coming together on Monday. If the pair moves back above the topside trend line on the hourly chart before heading to the support level, you have to close your eyes and buy it. In between is a 50-50 play.

The UK data today was not great, and that sent the GBPUSD lower before the US payroll numbers. Although the US data did end up sending the GBPUSD to new session lows, most of the downside occurred in the London morning session.

Nevertheless, the decline sent the price toward the 38.2% of the the move up from the June low at 1.28605. The underside of the broken trend line came in at 1.2871 on the daily chart. The low reached 1.2866 between the two levels. There was a correction into the close.

Where did that correction go to?

Looking at the hourly chart, to the 1.2892 level. That level was the low from Wednesday. Most of the selling remains.

In trading early next week, a move above the 1.2892 should lead to more buying but the 100 and 200 hour MAs at 1.2931-35 currently (blue and green lines in the chart below) should cause some pause. A break above that and traders will be looking toward the 1.2977-89 area.

For the AUDUSD, the RBA was more dovish this week and it sent the AUDUSD sharply lower. The price fell below the 0.7634 level (was an old ceiling level from June - see red circles 6, 7, 8, 9) and held it at red circle 10 on Tuesday. That level is back to being a ceiling in the new trading week. Closer resistance might be at 0.7610. Although the daily chart shows a move above the 0.7610 level today, that came on the employment volatility. The rest of the day had a high price at 0.7607. The problem is the low after employment only got to 0.7590. So there was not much action.