Dollar Gains after U.S. Jobs Report

The U.S. Non-Farm Payroll Report came out worse than expected. Traders were looking for a loss of between 175,000 and 225,000 jobs.

The U.S. Non-Farm Payroll Report came out worse than expected. Traders were looking for a loss of between 175,000 and 225,000 jobs. The actual number showed a loss of 263,000 jobs. The biggest job losses occurred in construction, manufacturing, retail and the government. Healthcare hiring was positive.

The U.S. Dollar initially rallied following the release of the jobs data. Traders perceived this as a sign that economic stimulus is not working and that the economy may need more money to get back on track.

The EUR USD sold immediately after the release of the jobs news but has erased those losses to move higher for the day. Traders are buying the Euro on the possibility that the Euro Zone economy may be in better shape than the U.S. economy. Oversold conditions are also contributing to the rally.

The U.K. economy continues to be the big issue with the GBP USD. The main trend is down technically but most of today’s earlier losses have been erased by intraday short-covering.

The USD JPY was trading weaker overnight and for most of the early morning. The Dollar began to gain strength shortly after the release of the jobs data. Traders are beginning to believe that the Japanese government is poised to defend against a sharp rise in the Yen. A break out over .9000 is possible.

The USD CAD is barely holding on to modest gains. A recovery in U.S. equities helped with the recovery in the Canadian Dollar, but weak crude oil prices limited gains. The USD CAD chart indicates that a break out over 1.0991 will turn the main trend to up, but until that happens, look for this price to remain resistance. On the downside, 1.0790 is solid support.

The higher yielding AUD USD and NZD USD are trading mixed. The main trend turned down in the Aussie on the daily chart and this pair remains in a position to post a weekly closing price reversal top. The New Zealand Dollar is trading higher. The weekly chart still indicates a firm market; however the daily chart indicates a developing downtrend.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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