U.S. Session Forex Recap – Jan. 11, 2016

  • U.S. economy added 292K jobs in Dec vs. 203K forecast
  • U.S. NFP figure upgraded from 211K to 252K in Nov
  • U.S. average hourly earnings flat in Dec vs. 0.2% estimate
  • U.S. unemployment rate unchanged at 5.0% as expected
  • Canadian economy added 22.8K jobs in Dec vs. 10.4K expected
  • Canada’s building permits fell by 19.6% vs. -3.2% forecast
  • Chinese CPI up from 1.5% to 1.6% vs. 1.7% forecast
  • Producer prices in China down by 5.9% as expected

Dollar traders weren’t so impressed by the upbeat U.S. NFP report but it looks like the safe-haven currency is gearing up for another round of forex gains this week.

Major Events:

U.S. December NFP report – Uncle Sam posted yet another stronger-than-expected jobs report, adding 292K positions in December versus the projected 203K gain. To top it off, the previous release was upgraded to show a 252K rise in hiring from the initially reported 211K increase. Meanwhile, the unemployment rate held steady at 5.0% as expected.

Perhaps what prevented most dollar bulls from charging was the fact that average hourly earnings stayed flat in December instead of showing the projected 0.2% uptick. This signals that salary growth was much weaker than expected, contrary to Fed expectations that rising wage inflation could support consumer price levels.

Canadian jobs report – Canada had its share of upbeat news, as its December employment report turned out better than expected. The economy added 22.8K jobs during the month, more than twice as much as the projected 10.4K gain. However, a closer look at the components of the report reveals that these were mostly part-time positions and that full-time hiring was actually down by 6.4K.

Chinese inflation numbers –  Over the weekend, China printed its latest batch of CPI and PPI figures. The headline CPI ticked up from 1.5% to 1.6% in December, lower than the estimated 1.7% reading, which means that there’s room for the PBOC to add stimulus if necessary. Producer prices fell by 5.9% as expected, indicating weaker price pressures down the line.

Major Currency Movers:

USD – The Greenback initially rallied upon seeing upbeat headline jobs data but later on gave back its gains. Still, the U.S. currency gapped up against most of its forex peers on downbeat Chinese inflation numbers.

USD/JPY broke below the 117.00 support area and dipped to a low of 116.69, EUR/USD rallied all the way up to a high of 1.0968, and GBP/USD struggled to keep its head above the 1.4500 mark.

Commodity Currencies – The comdoll gang is in the red once more, thanks to speculations of further easing from the Chinese central bank.

AUD/USD gapped down this week and is trading at .6956, NZD/USD slipped below the .6550 minor psychological level to a low of .6506, and USD/CAD resumed its climb to new highs at 1.4187.

Watch Out For:

  • 12:30 am GMT: Australia ANZ job advertisements
  • Japanese banks on holiday today

See more:

Asian Session Recap

London Session Recap

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