Dollar sharply higher after employment report
The same story again. The headline Non-farm payroll is disappointing, adding 92k jobs in Oct only comparing to expectation of 125k. However, prior month’s data was revised sharply higher from 51k to 148k. Aug’s data was further revised from 188k to 230k. Unemployment rate dropped further from 4.6% to 4.4%, reaching a five-year low. Average hourly earnings also beats expectation and increased 0.4%. Dollar is sharply higher across the board.
Next will be ISM non-manufacturing index which is expected to improve from 52.9 to 54 which could spark further rally if it provides another upside surprise.
USD/JPY
Daily Pivots: (S1) 116.73; (P) 117.05; (R1) 117.43;
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USD/JPY rises sharply in early US session on broad based dollar strength, breaking above mentioned 118.03 resistance. At this point, attention will be on 118.65 resistance. Firm break above this level will confirm the whole decline from 119.86 has completed with three waves down to 116.56. Short term outlook will be turned bullish and further rally should be seen towards 119.64 resistance. Otherwise, short term outlook remains mixed.
In the bigger picture, previous break below 117.37 is first warning that whole medium term up trend from 108.99 has completed. In other words, the break above multi-year trend line resistance (147.68 to 135.20 then to 121.38), relatively briefly in that time frame, was indeed a false break. However, this is not confirmed yet as USD/JPY still holds above outer rising channel (now at 115.81) and 38.2% retracement of 108.99 to 119.86 at 115.71. Hence a break above 118.65 will indicate rise from 113.39 is still in progress.
Read full report (EUR/USD, GBP/USD, USD/CHF, USD/JPY) here.
Shing-Ip Tsui is the founder and CEO of
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