Article Highlights

  • U.S. initial jobless claims at 246K vs. 251K forecast
  • Challenger job cuts down 38.8% in January
  • U.S. preliminary non-farm productivity up 1.3% in Q4 vs. 1.0% consensus
  • U.S. preliminary unit labor costs up 1.7% in Q4 vs. 2.3% consensus
  • Australia’s AIG services index down from 57.7 to 54.5
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The Greenback was off to a shaky start but it made a pretty solid comeback during the latter half of the New York session as traders priced in NFP expectations.

Major Events:

Mostly downbeat U.S. data – The latest batch of reports from Uncle Sam were mostly in the red, leading dollar bulls to doubt that the Fed can push through with its tightening plans for the year. The only bright spot was the initial jobless claims report, which printed a 246K increase versus the projected 251K figure and the earlier 260K reading, hinting at positive hiring momentum.

However, preliminary non-farm productivity for Q4 printed a 1.3% rise versus the 1.0% consensus while unit labor costs edged 1.7% higher instead of showing the projected 2.3% jump. This suggests that employees had to step up their output and put in longer hours but that the bump up in their wages wasn’t strong enough.

Upbeat NFP expectations – It’s NFP Friday, people! Forex junkies seem to be getting their hopes up for an upside surprise, especially since employment indicators released earlier this week printed stronger than expected results.

For one, the Challenger job cuts report showed a 38.8% year-over-year reduction in joblessness, a considerable improvement over the previous month’s 42.6% increase. The ADP report also printed an impressive 246K increase in hiring for January versus the projected 156K figure and the earlier 151K rise while the jobs component of the ISM manufacturing report reflected a faster pace of employment for the month.

If you’re planning on trading this report, make sure you review Forex Gump’s trading guide for the January NFP.

Major Market Movers:

USD – The scrilla proved that it still has some fight left in it as the focus shifted away from the Trump administration to potentially strong jobs data and Fed hawkishness.

EUR/USD turned upon hitting a high of 1.0829 then fell back to 1.0760, GBPUSD found resistance at the 1.2700 handle then slumped to 1.2520, USD/JPY bounced off a low of 112.17 to a high of 113.14, and USD/CHF is back above the .9900 mark.

Watch Out For:

  • 1:45 am GMT: Chinese Caixin manufacturing PMI (51.8 expected, 51.9 previous)

See also:

London Session Recap

Asian 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!