The EURUSD has turned around and looks to complete an employment lap as the market gets a little loopy. The high for the day reached just prior to the employment report extended to 1.1831. The fall took the price to 1..1762.The price is currently taking out the high for the day (near the 38.2% of the weeks trading range) as traders swing their positions (and bias) around intraday.
EURUSD down on the week but not able to keep the momentum going through 1.1743
Taking a week long perspective:
- Monday started with a gap (to me at least). The low on Friday came in around 1.2000. The high on the post 5 PM ET opening on Monday could only get to 1.1975. That was the high for the week.
- On Wednesday, the price for the pair started to build value below the 1.1876 level. This was the low from 2010. I call it the post-2008 crisis low. Note on the hourly chart the final bars that peaked against that level on Wednesday. Traders were establishing the line in the sand at the 1.1876. The level remains an important risk defining level for me. Stay below keeps sellers more in control. The
- On Thursday, the price tumbled to 1.1753 – within 10 pips of the level that the EURUSD was introduced on January 1, 1999.
Today, consolidation/corrective trading dominated before the report. The jobs gains were congruent with 2014 trends.
- The total jobs were 252K, not far from the 2014 average of 246K. Adding jobs is good. Can there be good and bad job creation? Yes, but gains are better than no gains.
- The wages were also congruent with the trend in that they were down. The YoY Average Hourly earnings started the year at 2.1%. It is ending the year by moving from 2.1% in August to 1.7% in the current month.
Needless to say, incomes growth is not great, but employment is better than no employment. Is the good from job creation better than the bad from the wages? Putting it another way, is it good enough to keep the economic momentum moving forward. That is the question that will be answered as 2015 unfolds. The Fed’s ambiguity from December will also need to be sifted through in the 1st quarter of 2015. Looking at the bond market this week, yields from Friday’s close to today are saying they are not expecting inflation, nor an over zealous Fed. The 2 year yield has fallen 11 bp, the 5 year is down 18 bp, and the 10 year is down 15 bp. So there has been a fairly uniform shift lower in the yield curve.
Overall, the EURUSD has shifted lower this week. The day is higher though. The next upside target being approached against the 100 hour MA now.
US bond yields.
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