Non farm payroll report showed 192k expansion in the US job market in February, slightly above expectation while prior month's figure was revised up from 36k to 63k. The surprise was in unemployment rate, which dropped to 8.9%, the lowest level since April 2009 while markets expected a rise to 9.1%...
Non farm payroll report showed 192k expansion in the US job market in February, slightly above expectation while prior month's figure was revised up from 36k to 63k. The surprise was in unemployment rate, which dropped to 8.9%, the lowest level since April 2009 while markets expected a rise to 9.1%. Looking into the details, private payroll rose 222k, up from 145k of prior two month's average. Average hourly earnings rose slightly by $0.01 to $22.87 while average work week held at 34.2 hours. While the data was solid, it's believed that more consistently strong data is needed before Fed would consider stimulus exit. Some economists believe that an excess of 200k job growths for a few months and a drastic decline in unemployment rate would be seen before Fed withdraw from the quantitative easing program.
Dollar extends today's strong rebound against yen after the release. EUR/USD spikes "higher" initially but then retreats as no other major currency follows. GBP/USD is stuck in range, a bit softer. Meanwhile, AUD/USD's dip through 1.0084 minor support is a surprise. USD/CAD is steadily in range.
Technically, there is no change in the near term bearish outlook in dollar index in spite of the recovery in early US session. Further fall is still in favor towards mentioned target of 61.8% projection of 81.31 to 76.88 from 78.87 at 76.13 first. On the upside, above 76.84 minor resistance will turn bias back to the upside and bring recovery. But after all, break of 78.87 resistance is needed to signal reversal. Otherwise, outlook will remain bearish.
USD/JPY Mid-Day Outlook
Daily Pivots: (S1) 81.93; (P) 82.23; (R1) 82.73; More
USD/JPY jumps further to as high as 83.02 in early US session and intraday bias remains on the upside for 83.96 resistance. As noted before, consolidation from 80.29 is still in progress with rise from 81.57 as another leg. Hence, strong resistance is expected at 83.96 to limit upside. ON the downside, below 82.31 minor support will flip bias back to the downside for 81.57 and break will target 80.93/81.12 support zone.
In the bigger picture, with 85.92 cluster resistance (38.2% retracement of 94.97 to 80.29 at 85.89) intact, there is no confirmation of reversal yet and the longer term down trend in USD/JPY is possibly still in progress for another test on 79.75 (1995 low). Decisive break of 79.75 will target 61.8% projection of 94.97 to 80.29 from 84.49 at 75.41 next. On the upside, though, sustained break of 85.92 cluster resistance will indicate that a medium term bottom is at least formed and stronger rebound should be seen through 90 psychological level.
Market Overview | Written by ActionForex.com | Mar 04 11 14:11 GMT