Forexlive Americas FX news wrap: US employment weak, but market shrugs it off
Forex news for NY trading on March 8, 2019
- Fox business news: China has taken trip to Mar-a-Lago off Xi calendar
- Crude oil futures settle the week at $56.07
- The JPY is the strongest currency this week, while the GBP was the weakest
- A look ahead to next week: Brexit vote. US retail sales, durables, inflation. BOJ decision
- ECB Exec Board Member Mersch:ECB confident rebound will ultimately come
- UK Brexit minister Barclay: UK has put forward a clear new proposal
- Baker Hughes oil rig count 834 vs 840 est
- European stocks ending the session lower
- NY Fed Nowcast comes in higher at 1.4% for Q1
- Barnier tweets on his briefing to EU27 Ambassadors
- Atlanta Fed GDPNow stays steady at 0.5%
- Trump: USMCA deal is done, it will go to Congress shortly
- Trump says confident of getting a deal with China
- February non-farm payrolls +20K vs +180K expected
- Canada net change employment 55.9K vs 1.2K est.
- US January housing starts +1230K vs +1195K expected
- Canada February housing starts 173.1K vs 205.0K expected
- The NZD is the strongest. The GBP is the weakest as NA traders enter for the day
- UK PM May: EU also has a choice to make on Brexit deal
- UK PM May: No one knows what will happen if my deal gets rejected
A snapshot of other markets near the US close is showing:
- Spot gold rose $14 or 1.10% at $1300. The high extended to $1300.85. The low was down at $1285.06. The weaker US jobs data and the lower dollar, helped to kick the price higher and toward resistance defined by the high in January at $1298 and the low in February at $1302.
- WTI crude oil is trading down -$0.52 at $56.14. For the week the price was up modest.
The price action in the markets for the North American session were influenced by the employment data. The US non farm payroll, rose by 20K which was well below the 180K estimate. However, not all was so bad. The Unemployment rate fell to 3.8% from 4.0% last month and below the 3.9% estimate. The so called underemployment rate plunged to 7.3% from 8.1% (big move lower), and earnings increased by 0.4% vs 0.3% estimate. So there was enough ambiguity to make for some swings in the markets and soften the dollars declines.
PS. the Canada employment was much stronger than expectations for the 2nd week in a row. (CLICK HERE for the details).
In the US stock market today, the S&P and Nasdaq gapped below their 200 hour MAs at 2746.19 and 7407.92 (currently) respectively and stayed below those MA for most of the rest of the day. However, there was an end of day rally that did take the Nasdaq back to the 200 hour MA and it closed just above that MA level. The S&P retraced a lot of its sell off as well (the Dow did too). So Monday's trade will be important for the overall bias for stocks. Move above the 200 hour MAs (and then 200 day MAs) and the bulll is released. Stay below and there may be more bear in the market still.
Nevertheless, the breaks below the respective 200 hour MAs in the S&P and Nasdaq indices, were the first time the price has traded below the 200 hour MAs since mid-January. That tilts the bias a little more to the downside for equities.
IN addition, for the week, the major US indices fell each day. In fact, the highs were made in the first hour of trading on Monday.
The European markets were also lower today as were the Asian stock markets (China trade data was horrible). Below are the ranges and changes for the major stock indices.
What about the forex?
The USD did move lower during the NY session. The dollar fell against all the major currencies with the exception of the GPB which was the runaway weakest of the major currencies (Brexit concerns continue to weigh on the GBP and made it the weakest of the majors this week as well).
If it weren't for the USDs gain vs the GBP, the USDs cumulative declines would have been worse. Nevetheless, it wasn't a runaway dollar bashing today (see the USDs changes in the changes below) despite the much weaker NFP number.
What are some of the technicals saying in some of the major pairs?
EURUSD. The EURUSD thsi week made its high in the first hour of trading and bottomed late Thursday after breaking below the 2019 lows at 1.12148. The low reached 1.1174 before starting the rebound higher today. The price was trading around the 2019 lows at the time of the data release and after some up and then down move, the 1.1214 level held (i.e. the 2019 old low). The rest of the day was spent grinding to the high at 1.12453, before moving lower into the close (closed around 1.1235). In early trading next week, traders will be focused on the 1.12148 "old level" as a bullish/bearish bias. Move back below would be more bearish. A level on the topside to get above would be the 50% of the move down from Thursday. That comes in at 1.1247. This week the ECB was more dovish. Next week, the Brexit situation will be an influence.
GBPUSD. Like the EURUSD, the GBPUSD opened near the week's highs on Monday and moved lower through the week. Unlike the EURUSD which rallied today, the GBPUSD fell and closed near the lows for the week at 1.29884 (high for the week peaked at 1.3252 on Monday). The one saving grace for the buyers/longs, is the 200 day MA is also at the 1.29884 level. So the price did stall against that key MA and COULD technically see a bounce from here. The not so good news for the bulls is the rebound to 1.3012 level at the close is not that far from the lows. As a result, the buyers will still have a lot to prove in the new week AND if Brexit is a concern for the EURUSD longs, it is a worry x 2 for the GBPUSD longs.
USDJPY: The USDJPY opened the NY session lower (the high reached 111.64 and was around 111.10 the start of the NA session), and moved from a pre employment high of 111.19, to a new low since February 28 of 110.71 after the US employment report. From there the pair started a rebound and that rebound did not stop until lapping the NY session decline (high reached 111.183). The pair traded up and down with 111.00 as support for the rest of the day. Next week a move below the 111.00 should be more bearish. Above, the fall from the high today took the price below the 100 and 200 day MA and 200 hour MA at the 111.37-48 aeaa. If the price is to move higher away from 111.00, that area would be a key area for the bulls and bears. Move above, more bullish. Stay below, more bearish.
USDCAD: Just when you thought the USDCAD was going to run even higher as a result of a dovish BOC and weak data, the 2nd consecutive strong jobs report (+55.9K vs +1.8K estimate) takes the wind out of the bulls sails. THe USDCAD fell from around 1.3458 to a low at 1.3389. That low just so happened to be the 100 hour MA (it is now higher at 1.3396 and rising). In the new week, that 100 hour MA will be the barometer for the bulls/bears. Stay above is more bullish. Move below would be more bearish. On the topside the high from Thursday and Friday each stalled at 1.34667 (double top). That ceiling would need to be broken to keep the bullish run going.
AUDUSD. The AUDUSD moved higher with the lower lower. That move was despite worse than expected China trade data released in the Asian session. I guess it was priced in. The run from the low at 0.70027 stall near the highs from yesterday and the 100 hour MA at 0.7051 and the price dipped into the close to the 0.7041 level. It was a corrective day higher, in what was a bearish week lower, but that ceiling at 0.7051 will need to be busted above to get the buyers/bulls running some more. Failure to do that, and the downside remains the dominant bias.
Wishing all a happy and healthy weekend.