Article Highlights

  • U.S. employment up by 38K in May versus 159K forecast
  • U.K. April NFP downgraded from 160K to 123K
  • U.S. unemployment rate fell from 5.0% to 4.7% vs. 4.9% estimate
  • U.S. average hourly earnings up by 0.2% as expected
  • U.S. ISM non-manufacturing PMI slid from 55.7 to 52.9
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Friday’s New York session turned out to be an absolute carnage for the Greenback as the U.S. NFP report printed dismal results and dashed hopes of a June hike.

Major Events:

U.S. May NFP report – So much for June rate hike expectations! The latest NFP release painted a grim picture of the U.S. labor market, as hiring rose by only 38K instead of the estimated 159K gain. To top it off, the previous month’s reading was downgraded from initially reported 160K increase to just 123K.

Surprisingly, the unemployment rate fell from 5.0% to 4.7%, lower than the projected drop to 4.9%. As it turns out, this was spurred by a drop in the participation rate from 62.8% to 62.6%, signaling that Americans might be exiting the labor force to give up their job hunt. Meanwhile, average hourly earnings posted a 0.2% uptick as expected. Check out Forex Gump’s review of the May NFP report for more deets!

More Brexit polls favoring the “leave” camp – Analysts have started to up the odds of a potential Brexit in this month’s EU referendum as several opinion polls have started showing a shift in the lead favoring the “leave” camp. A survey conducted by Opinium revealed that 43% voted to leave while 40% voted to stay, with the rest still undecided.

Former London mayor Boris Johnson has still kept pretty busy sharing his pro-Brexit views, focusing on immigration issues and Turkey’s pending membership in the EU – two major concerns that are leading some folks to consider calling it quits with the rest of the region.

Major Currency Movers:

USD – The Greenback plummeted instantly against its peers upon seeing the May NFP reading come way below the 100K level.

EUR/USD jumped from 1.1145 to a high of 1.1358, USD/JPY fell from the 108.80 area to a low of 106.60, USD/CHF tumbled from the .9900 resistance to a low of .9770, and AUD/USD skyrocketed back above the .7300 mark.

JPY – Risk-averse traders dumped their dollar holdings and ran back to the Japanese yen, which regained its top spot among the lower-yielding currencies.

EUR/JPY fell from the resistance at 121.50 to a low of 120.89, AUD/JPY fell back to the key support area at 78.50, NZD/JPY hit a low of 73.85, and CAD/JPY broke below the 83.00 handle to a low of 82.17.

GBP – The pound kept sliding throughout the day as traders priced in higher odds of a Brexit and increased uncertainty for the U.K. economy.

GBP/USD fell to a low of 1.4391 but got a boost from downbeat NFP data, GBP/JPY was unstoppable in its drop below the 157.00 handle to a low of 154.75, EUR/GBP popped back up the .7800 mark to a high of .7906, and GBP/AUD is down to the 1.9650 mark.

Watch Out For:

  • New Zealand banks closed on a holiday today
  • 1:00 am GMT: Australia MI inflation gauge (0.1% previous)
  • 1:30 am GMT: Australia ANZ job advertisements (-0.8% previous)

See also:

Asian Session Recap

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.

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

Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!