Dollar Bears Jump in After NFP
Dollar edged higher just after a stronger than expected NFP number which shows the US economy added 132k jobs in Nov comparing to expectation of 110k. However, the positive picture was dampened by downward revision of Oct’s figure 92k to 79k. So, we’re having 211k jobs added in Q4 so far. Comparing to Q3’s total of 556k, it’s likely that Q4’s final data will be just slightly above half of that. The Q4 total may even be less that Q2’s total of 346k unless we’ll get another 130k more jobs in Dec.
Also, average hourly earnings increased a mere 0.2% mom only, though, the yoy growth increased from 3.9% to 4.1%. Unemployment rate increased mildly from 4.4% to 4.5%.
EUR/USD
Daily Pivots: (S1) 1.3264; (P) 1.3294; (R1) 1.3313;
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Despite a dip in early US session, EUR/USD’s downside was contained above mentioned 1.3219 support and rebounds strongly afterwards. As discussed before, short term bias remains on the upside as long as EUR/USD stays above 1.3219 support. Firm break above 1.3362 resistance will confirm recent rally has resumed for next upside target of 1.3668 resistance (04 high).
On the downside, despite bearish divergence condition in 4 hours MACD and RSI, a drop below 1.3219 support is needed to confirm a short term top is formed and bring correction to 1.3131 cluster support (38.2% retracement of 1.2760 to 1.3362 at 1.3132). But in such case, downside should still be contained above 1.2938 support and bring another rally.
In the bigger picture, the current medium term rise from 1.1639 could either be resumption of multi-year up trend from 0.8223 or just part of a larger scale consolidation that started at 1.3668. It’s early to confirm which case it is. Nevertheless, medium term outlook remains bullish as long as EUR/USD stays above 1.2760 support or before clear reversal pattern forms. On the upside, 100% projection of 1.1639 to 1.2978 from 1.2483 at 1.3822 will be key. Decisive break of this 1.3822 level will confirm long term up trend has resumed for 1.4 psychological resistance first.
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Shing-Ip Tsui is the founder and CEO of
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