The ADP non-farm payroll release on Wednesday was a good indication of things to come with the official NFP release. Analysts had expected to see half a million new jobs but the actual number was lower by one half. Average hourly earnings came in better than expected at 0.3% vs. 0.1% estimated by the analysts. The unemployment rate was lower than the consensus estimate at 6.7% (6.8% expected). USDCAD is being sold hard at the time of writing this. The Canadian employment numbers were a positive surprise with 62.1K new jobs, which is almost triple the 21K expected by the analysts.
The initial reaction to worse than expected payroll numbers in EURUSD was to sell the pair. This basically means that the market participants reacted by going long to USD against the EUR. Perhaps we will find out later what the fundamentals behind the move were but on a technical basis, the explanation could be that the price is trading near a resistance level after a long rally. Buyers came in at 1.2131 and have since pushed EURUSD again to levels near today’s highs. It will be interesting to see if we can push higher now. If not, then it could well be that the negative NFP results were widely expected and already priced in. The key support and resistance levels 1.2040, 1.2100, 1.2131, 1.2174 and 1.2213.
Chief Market Analyst
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