EURUSD, Daily
US nonfarm payrolls surged 292k in December following the 252k November gain (revised up from 211k) and October’s 307k (revised from 298k). The net revision was 50k. The unemployment rate was steady at 5.0% for a 3rd straight month, versus the 5.1% in September. The labor force climbed 466k, while household employment jumped 485k. Private payrolls increased 275k with a 45k gain in the goods producing sector, a 45k gain in construction, and an 8k rise in manufacturing. The service sector added 230k, with business services leading the strength, rising 73k. The Government added 17k. Average hourly earnings were unchanged following November’s 0.2% gain. The workweek was flat at 34.5. This is a solid report that underscores the strength in the labor market.
EURUSD reacted lower as the better than expected labour numbers were released. The pair found support from Wednesday’s high and is at the time of writing trading above the 1.0860 level that supported price during the hours before the NFP publication. Market is trending lower in the daily picture which suggests that rallies such as this should be shorted at resistance levels, providing price action at resistance supports such intentions. The 4h timeframe suggests that should the price rally much higher from current levels market gets close to upper end of the down sloping channel and the upper Bollinger Bands. Important support and resistance levels are at 1.0758 and 1.0880. I expect the market to reverse near 1.0880 resistance and head towards 1.0758 support.
Janne Muta
Chief Market Analyst
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