With stocks stable. Focus on employment

The estimates:

  • change in nonfarm payrolls: 200 K vs. 211K last
  • change private p toward 201K vs. 197K
  • unemployment rate 5%
  • average hourly earnings +0.2 month on month, +2.7%. Year on year.
  • Average weekly hours 34.5 vs. 34.5

The EURUSD has backed off with no fireworks from stocks/PBOC. The decline puts the pair right on the 200 hour MA (green line in the chart above). What are some tech levels to eye above and below and why?

If the number is weak(<180K, lower revisions, higher unemployment rate, lower wages)

  1. 1.0889-1.0903. The yellow area in the chart above. This is an area where there has been a number of swing lows and swing highs going back to the December
  2. 1.0938-43. This is the topside trendline, and the high price for the week.
  3. 1.09918. This is the high price from December 28
  4. 1.1000-1.1010. The psychological level (perhaps option driven) and the high price from December 16.
  5. 1.10378 – 429. The 100 and 200 day moving averages. The 2 moving averages are converged this is a key level for any move to the upside. Back on December 15 the price moved above the 200 day moving average, but stopped right on the 100 day moving average. A move to this level would imply a range for the day of about 188 pips. If stocks decline and it is a really weak number this level should be targeted.

If the number is strong (>220, higher revisions, lower unemployment rate, higher wages)

  1. 1.08509: The 50% midpoint of the move down from the December 24 high
  2. 1.08125 – 176. This is the 100 hour moving average and the broken 38.2% of the move down from the December 24 high
  3. 1.0788.1.0802. This area is the 50% of the move up from the December 2015 low to the December 2015 high (at 1.0788). The swing lows from December 2007 (1.0795) and December 2017 (1.08019), also come in this area. This is a key area to get below and stay below on a move to the downside.
  4. On a move below 1.0788, should solicit a more bearish bias for the pair with the swing low from yesterday at 1.0770 (red 4) and then the lows for the week at the 1.07099 (red 5) as targets.

If the number is look for the price may look to center in the blue area.

Caveat for trading today is the stock market is still in play. Weekend risk may also be higher and prompt Friday squaring up flows. The talk of Fed action will also be an influence.

For the USDJPY, this is a big picture view of where we are. The price of the USDJPY has been a path lower as of a result of the much weaker stock market. The pair moved below the 118.22-508 area which is a bunch of swing lows going back to Feb 2015. This is a bullish/bearish line in the sand for the pair today (and going forward). Move above and more bullish. Move below more bearish. We are trading within the area now.

Looking at the hourly chart below, on the topside, the 100 and 200 hour moving averages come in at 118.59 and 119.459. On Monday, the high price found sellers against the 100 hour moving average. , The price has not traded above that line since. So that level should be

significant. Above that the 119.00 level which is the midpoint of the move down from last Thursday's high.

Something that causes the stock market to fall (or if we just get weak stocks into the weekend) will look through the lows.