NFP was a disappointment with a significant job loss. But looking at last month’s figure gives the dollar bulls some strength, especially against the Euro.
Non-Farm Payrolls for December fell by 85,000. This was a big disappointment, as the market was expecting a balanced figure, and even a rise in jobs.
The rise in jobs did come – but in last month’s figure. Last month’s number was revised from a loss of 11,000 to a rise of 4,000. Although this is a late figure, it is the first gain in jobs in almost two years.
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The Unemployment Rate remained at 10% – the double digit psychological level that weighs on policymakers. Also here, there is a small upside – Early expectations stood on a rise to 10.1%. This sweetens the pill…
The focus is on the more recent data, so the dollar is losing ground across the board. But the move is quite hesitant. EUR/USD was down to 1.4270, suffering from bad employment figures in Europe. After the release of the NFP, it rose steadily to 1.44 (at the time of writing).
The technical resistance region is at 1.4444 to 1.4480. EUR/USD is still keeping some distance from that line. It failed to break 1.4480 earlier this week, and doesn’t seem to push through at the moment.
A loss of so many jobs, when there were high hopes for a gain in jobs should have sent EUR/USD leaping out of the range. The current move is slow for a Non-Farm Payrolls release, and it doesn’t break technical levels. I see last month’s revision as the reason.
Note that a “Friday effect” could still happen. I’ll update this post on developments.
Article republished on TheLFB.
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