Article Highlights

  • US nonfarm payrolls 74K vs. 195K forecast
  • US unemployment Rate 6.7% vs. 7.0% forecast
  • Canada unemployment rate 7.2% vs. 6.9% forecast
  • Canada net employment change-45.9K vs. 14.1K forecast
  • Japan celebrates Coming-of-Age Day (bank holiday)
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The dollar wasn’t able to recover from its losses as the surprisingly weak NFP report dominated price action in the US session. Uncle Sam’s unemployment rate might have dropped to its five-year low but the drop in participation rate as well as data on working hours and average earnings convinced traders that there is weakness in the labor market.

EUR/USD and GBP/USD both showed retracements two hours after the report’s release but ended up closing near their intraday highs anyway. USD/JPY and USD/CHF didn’t bother with retracements as it steadied near its post NFP report levels. The Aussie and Kiwi also got in the USD weakness train but the Loonie was held back by Canada’s even weaker labor prospects. In fact, USD/CAD even popped up to its four-year highs!

One month doesn’t make a trend though. With only tier 2 events from Australia and China and Japan on a bank holiday, I wouldn’t be surprised if we see continuation of last Friday’s price action. Also keep an eye out for profit-taking in case traders decide to focus more on the Fed’s taper schedule than the actual NFP report.

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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