Non Farm Payrolls declines by −63k as stock markets fall

Sun, Mar 9 2008, 23:09 GMT
by Easy Forex Team

Easy Forex

Non Farm Payrolls declines by -63k as stock markets fall

U.S. Dollar Trading (USD) was subject to an abysmal reading in jobs data for the month of February. Non Farm Payroll figures for the month declined by -63k jobs, disappointing expectations of a rebound by 23k jobs whilst previous figures for the month of January were revised lower to -22k compounding the woes on the US economy. Although the figures were in view of a depreciating dollar, market uncertainty, falling stock prices and risk aversion favoured a reprieve on the greenback. In U.S. share markets the NASDAQ was down by -8.01 points (-0.36%) whilst the Dow Jones also fell by -146.70 points (-1.22%). Crude oil prices remained firm above US$105.00 a barrel for much of the session, before declining by a meager US$0.16 to US$105.31.

The Euro (EUR) once again traded at a record high in the lead up to the much anticipated Non Farm Payrolls data out of the world’s largest economy. With figures declining by -63k for the month, the Euro was pressured by falling stock prices and profit taking. Overall the Euro traded with a low of 1.5314 and an all time high of 1.5465 before closing the day at 1.5346 in the New York session.

The Japanese Yen (JPY) governed plenty of activity on the majors as risk aversion on falling stock prices took its course. The Japanese Yen extended it recent gains versus the dollar trading at its lowest level since January 2000, and within sight of its December 1995 low. Although recent multi year lows prompted investors to assume intervention by Japanese monetary officials in the near term. Overall the USDJPY traded with a low of 101.41 and a high of 103.24 before closing the day at 102.83 in the New York session. Japanese Machine orders for the month January are expected to be seen at 2.9% well above the previous -3.2%.

The Sterling (GBP) continued its rally above the $2 level trading at its highest level since the 18 December 2007, holding firm upon the Non Farm Payrolls data release out of the U.S. unlike a number of majors. Overall the GBPUSD traded with a low of 2.0097 and a high of 2.0216 before closing the day at 2.0148 in the New York session. Key data out of the UK on Monday will include Industrial Production with economists forecasting a rise of 0.1% for the month of January, rebounding from the previous -0.1%.

The Australian Dollar (AUD) like other high yielder’s was sold on the back of falling stock prices in the later part of the U.S. session, failing to maintain its gains throughout the day. Overall the AUDUSD traded with a low of 0.9262 and a high of 0.9359 before closing the day at 0.9274 in the New York session.

Gold (XAU) was sold on the back of further profit taking, despite Oil remaining close to record highs above US$105.00 a barrel. XAU traded with a low of 970.05 and a high of 988.62.

TECHNICAL COMMENTARY

Euro – 1.5365
Initial support at 1.5262 (Mar 6 low) followed by 1.5146 (Mar 5 low). Initial resistance is now located at 1.5463 (Mar 7 high) followed by 1.5500 (1.4311 plus 0.618 of 1.3361 to 1.4967).

Yen – 102.50
Initial support is located at 101.42 (Mar 7 low) followed by 101.26 (Nov 1999 low). Initial resistance is now at 104.19 (Mar 5 high) followed by 104.97 (Jan 23 high)

Pound – 2.0165
Initial support at 1.9975 (Feb 27 low) followed by 1.9896 (Mar 6 low). Initial resistance is now at 2.0216 (Mar 7 high) followed by 2.0250 (50% retracement of the 2.1161 – 1.9338)

Australian Dollar – 0.9265
Initial support a 0.9219 (Mar 4 low) followed by 0.9122 (38.2% retracement of the 0.8513 to 0.9499 advance). Initial resistance is now at 0.9421 (Mar 3 high) followed by 0.9499 (Feb 28 high)

Gold – 972.90
Initial support at 957.20 (Mar 4 low) followed by 949.00 (Feb 27 low). Initial resistance is now at 991.00 (Mar 5 high) followed by 1000.00 (Round Number)