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Non-Farm Payrolls Disappoint – Dollar Retreat Limited

Non-Farm Payrolls disappointed with a gain of only 103K jobs, lower than 160K that was the low end of expectations. The unemployment rate fell to 9.4%, and this somewhat balances the NFP. EUR/USD choppy, but doesn’t rise too much.

EUR/USD, that broke down before the release,  jumped from 1.2940 to 1.3020 but then fell below 1.30 once again. Trading is extremely choppy.

Update: EUR/USD went as low as 1.2935 before rising again. Choppy indeed.

Next support is at 1.2920, followed by 1.2840 and the important support line of 1.2722. Above, 1.2970 is the pivotal line that held the pair during most of the day. It’s followed by 1.3080 and 1.3180.

See more levels in the EUR/USD forecast.

Also the reaction of USD/JPY is limited – an initial dip was followed by a retreat.  AUD/USD, which is much less fragile and less hesitant than the Euro, enjoys a strong gain – jumping from 0.9910 to 0.9960, in a steady and strong move.

High expectations turned into a bitter disappointment. This disappointment follows last month’s shortfall in jobs, and is NOT in line with all the other figures we’ve seen during the same month – December.

Last month’s figure was revised to the upside – from 39K to 71K, showing that indeed, the gap between the NFP and other indicators wasn’t justified. Will the current disappointing release also be revised to the upside?

Is this a false disappointing number? Or is the US job market still not recovering?

I find some optimism in the “real unemployment rate” figure – which includes also the people that have given up on finding a job. The figure, marked U-6, dropped in December from 17% to 16.7%. This is still extremely high, but it shows that something is moving in the US job market.

The expectations towards the Non-Farm Payrolls rose during the week, boosted by strong PMI (purchasing managers’ index) figures and especially by the outstanding ADP report for the private sector, showing a gain of 297,000 jobs, the best since 2006.

ADP hasn’t always been a good indicator for the NFP, and as the government made some layoffs, the private sector doesn’t reflect everything.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.