EUR/USD challenges lows near 1.0540
The pick up in the demand for the greenback keeps EUR/USD depressed around daily lows in the 1.0540 area. Spot has briefly tested highs above the 1.0600 handle after US Noon-farm Payrolls disappointed expectations during December. However, the spike was ephemeral and the pair quickly corrected lower as market participants delved into the details of the release, showing the much-awaited Average Hourly Earnings have surprised to the upside.Today’s results helped the Dollar to regain some ground lost following the recent sell-off, although they will not prevent the US Dollar Index to close its second consecutive week with losses. Later in the session, November’s Factory Orders are due while Chicago Fed C.Evans (voter, dovish) and Richmond Fed J.Lacker (2018 voter, hawkish) are due to speak later. Previously, Cleveland Fed L.Mester (hawkish) said that three rate hikes during the current year seems reasonable, adding to USD buying. The pair is now losing 0.50% at 1.0551 facing the next support at 1.0483 (20-day sma) followed by 1.0387 (low Jan.4) and finally 1.0350 (2016 low Dec.20). On the flip side, a breakout of 1.0619 (high Jan.6) would target 1.0654 (spike Dec.30) en route to 1.0677 (55-day sma).

GBP/USD keeps red near 1.2350 after NFP data
The GBP/USD pair maintained its bearish bias near session through following the release of closely watched monthly jobs report from the US. Currently trading around 1.2350 region, the pair ran through some offers despite of a disappointing headline NFP print. According to the data release, the US economy added 156K new jobs during the month of December and the unemployment rate ticked higher to 4.7% from previous month’s 4.6%. The headline number fell short off consensus estimates, pointing to addition of 178K new jobs. However, average hourly earnings surprised on the upside and came-in to show a growth of 0.4% for December as compared to a growth of 0.3% expected and a contraction of 0.1% recorded in the previous month. Today’s mixed jobs report failed to influence market expectations over Fed rate-hike actions in 2017, albeit helped the key US Dollar Index to hold on to the recovery gains following yesterday’s sell-off in wake of slightly less hawkish FOMC meeting minutes. A follow through selling pressure below 1.2335-30 support, the pair seems vulnerable to break below 1.2300 handle and head towards testing its next support near 1.2285 horizontal zone, en-route 1.2240-35 support. On the upside, sustained recovery momentum back above 1.2400 handle might lift the pair back towards 50-day SMA resistance near 1.2425-30 region, which if conquered should pave way for continuation of the pair’s recovery trend further towards reclaiming 1.2500 psychological mark.

USD/JPY surges to fresh session peak, eyeing to reclaim 117.00
The USD/JPY pair's recovery momentum gained further traction in the last hour, accelerating the move to a fresh session peak. Currently trading around 116.70 region, the pair caught fresh bids near 116.00 handle after surprisingly stronger-than-expected average hourly earnings growth of 0.4% in December as against previous month's unexpected contraction by 0.1% and 0.3% growth expected. After Thursday's disappointing ADP report, economists had already scaled down their expectations from today's headline number and hence, today's report was primarily looked upon for its implications on inflation. Upbeat earnings growth, coupled with expected aggressive fiscal policies by the incoming Trump administration, now seems to be fueling hopes of inflationary pressure and reaffirmed expectations of 2-3 Fed rate-hike moves in 2017. Looking at the other aspects of the jobs report, the US economy added far less than expected new jobs in December, and the unemployment rate also ticked higher to 4.7% as more people entered the labor force, which again portrayed healthy job market. Today's mixed jobs report provided an additional boost to the US Dollar's recovery from Thursday's three-week low, touched in the aftermath of slightly less hawkish FOMC minutes. A follow through buying interest should assist the pair to reclaim 117.00 handle and continue heading higher further towards 117.30 resistance area. On the flip side, 116.30 level now seems to protect immediate downside. Weakness below this immediate support might now be bought into and hence, might limit any further downslide near 116.00 round figure mark.

USD/CAD drops below 1.3200 post-data
The Canadian dollar picked up extra pace vs. its American neighbour on Friday, sending USD/CAD to challenge daily lows in sub-1.3200 levels. Spot met extra selling pressure after the US economy has created less jobs than expected during December, 156K vs. 178K initially forecasted and lower than November’s 204K (revised). The jobless rate has ticked higher to 4.7%, matching estimates, while Average Hourly Earnings surprised to the upside, up 0.4% during the last month of 2016. In Canada, Employment Change surged above estimates by nearly 54K and the unemployment rate stayed put at 6.9%. Further data showed a trade surplus of $0.53 billion in November, revering the previous $1.02 billon deficit. As of writing the pair is losing 0.21% at 1.3188 facing the next support at 1.3115 (2-month support line) and then 1.3078 (low Dec.14). On the upside, a breakout of 1.3311 (38.2% Fibo of the 2016 drop) would open the door to 1.3383 (20-day sma) and finally 1.3463 (high Jan.3).

AUD/USD pulls back from highs after NFP, still on track for weekly gain
AUD/USD pulled back from daily highs as the greenback strengthened following the release of the US nonfarm payrolls report. Despite the US economy created less jobs than expected (156K vs 178K expected) the details were encouraging.November and October’s figures were revised by a combined +19,000 while hourly pay increased 2.9% from a year earlier, marking the fastest yearly increase since mid-2009. AUD/USD came under mild pressure and made fresh lows for the day at 0.7304. The pair was last trading at 0.7309, still down 0.31% on the day but on track to post a gain for the first week of 2017. As for technical levels, next supports are seen at 1.0490 (21-day SMA), 1.0389 (Jan 4 low) and 1.0339 (Jan 3 low). On the other hand, resistances line up at 1.0616 (Jan 6 high), 1.0662 (50-day SMA) and 1.0700 (psychological level).

 


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