U.S. Session Forex Recap – Dec. 8, 2014

  • US NFP prints at 321K vs. 230K expected
  • US jobless rate steady at 5.8%
  • US trade balance shows 43.4 billion USD deficit vs. 41.2 billion expected and 43.6 billion previous
  • US factory orders slips further by 0.7% vs. 0.5% decline last month
  • CA net employment change shows 10.7K decrease vs. 43.1K increase in October
  • CA unemployment rate ticks higher from 6.5% to 6.6%
  • CA trade balance shows 0.1B CAD surplus vs. 0.15B CAD surplus expected, 0.31B CAD surplus in September

The NFP report has always attracted forex volatility hunters and it sure didn’t disappoint last Friday! Thanks to a strong reading, the dollar once again posted significant gains against its major counterparts.

The non-farm payrolls report was expected to print at 230K along with an unemployment rate of 5.8%. While jobless rate printed as expected, the headline NFP figure came in at a whopping 321K and boosted the 12-month average to a record high of 278K. The miss in factory orders somewhat dampened the dollar’s momentum, but still wasn’t enough to stop the dollar from ending the session higher against its major counterparts.

For forex newbies out there, last Friday’s strong NFP reading supported claims that Uncle Sam is firmly on the road to recovery, and could further urge the Fed to tighten its interest rates some time in early 2015.

Dollar bulls who have been relentless throughout the week continued their cause. USD/JPY had the most notable move with its drive to a five-year high of 121.69 while GBP/USD also made headlines with its 113-pip drop to 1.5572. Even EUR/USD, which lollygagged around 1.2350 before the release, eventually fell and closed below the 1.2300 handle.

Even the comdolls had no chance against the low-yielding Greenback. AUD/USD slipped by 47 pips to .8327 while NZD/USD fell by 52 pips to .7712. USD/CAD, which also reacted to Canada’s worse-than-expected trade and employment numbers, jumped to an intraday high of 1.1376 before settling back down to 1.1432.

Will Asian session traders extend the dollar domination theme? Japan is set to release is current account numbers as well as its final GDP report at 12:50 am GMT, followed by the BOE’s quarterly bulletin at around 1:00 am GMT. But these reports will probably take a backseat against China’s trade balance report at 2:00 am GMT. Market players are expecting a surplus of 43.95B USD, down from 45.41B USD last month. Watch the details on import and exports closely, as it could set the tone for risk appetite throughout the Asian session, if not for the day.

Good luck and good trading, folks!

See also:

London Session Recap

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