U.S. Session Forex Recap – Apr. 6, 2015

  • US NFP report: 126K vs. 245K expected, 264K previous
  • US unemployment rate: still at 5.5% as expected
  • US labor participation rate down by 0.1% to 62.7%
  • US average earnings: up by 0.3% vs. 0.2% expected
  • USD bears reign but fail to find momentum

Ooomph! The dollar was hit from all sides at the NFP report’s release despite the absence of our European trader friends. Exactly what was in the highly-anticipated report anyway?

The NFP report probably wouldn’t have made as much impact if the results had not been as disappointing. The headline non-farm payroll figure clocked in at 126K, its lowest since December 2013 and its first sub 200K reading since 1994. Yikes!

Meanwhile, unemployment rate remained at 5.5% as workers left the labor force. See, labor participation rate declined by 0.1% to 62.7% in March. And if those weren’t enough to spook the dollar bulls, then the net 69,000 downward adjustment to January and February’s figures did the trick.

For forex newbies out there, you should know that a significantly disappointing jobs report weakens arguments for a mid-year rate hike for the Fed, as it hints that the economy still needs stimulus.

Still, the dollar bears failed to gain momentum during the session, partly because of the absence of European traders and partly because some aren’t taking one month’s worth of data as a trend.

Market players point to the goods-producing sector, which took the most hits on strong dollar and lower oil prices. The leisure and hospitality industry also took a step back, likely on unfavorable weather conditions.

EUR/USD popped up by 112 pips (+1.03%) to an intraday high of 1.1026 before settling back down to 1.0970, while USD/JPY also fell by 72 pips (-0.61%) to 118.86 before closing at 118.96. Even GBP/USD hit a high at 1.4945 before closing with a 65-pip gain (+0.44%) to 1.4914.

Even the comdolls managed to gain a few on the Greenback. AUD/USD jumped to an intraday high of .7693 before closing at .7642 while USD/CAD dropped to 1.2430 before ending the session at 1.2482.

We don’t have a lot on the docket today with Australia and New Zealand celebrating Easter Monday and China’s markets out on Tomb Sweeping Day. Japan is set to print its preliminary leading indicators report at 5:00 am GMT though. The report doesn’t usually cause significant volatility for major currencies, so watch out for continuation of last Friday’s moves instead.

Good luck!

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

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