Dollar surges after NFP shocks
The Forex market was shocked by an unexpectedly low NFP
number today which increased merely 51k compared to expectation of 123k increase. Dollar spikes lower. But another shock came in as traders realize that Aug’s number was sharply revised upward from 128k to 188k. That makes the average change of last two month’s NFP at 119.5k, not a bad number. Considering the unemployment rate also unexpectedly dropped to 4.6% this month, dollar reversed and was pushed sharply higher in early US session. Technically speaking with break out of recent range in EUR/USD and USD/JPY, further dollar strength should be seen.
EUR/USD
Daily Pivots: (S1) 1.2668; (P) 1.2697; (R1) 1.2722;
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EUR/USD spiked higher in early US session but was limited below mentioned 1.2725 resistance. Subsequent sharply fall has pushed EUR/USD below 1.2630 low. As discussed before, break of 1.2630 support has shifted favor to the case the EUR/USD is already in a larger scale consolidation that started from 1.2978. In other words, further weakness should be seen towards 1.2457 cluster support (38.2% retracement of 1.1639 to 1.2978 at 1.2467).
So, intraday bias will stay on downside as long as EUR/USD stays below 1.2630 support turned resistance. Next downside target will be 100% projection of 1.2829 to 1.2639 from 1.2765 at 1.2575. Break will encourage further fall towards 161.8% projection at 1.2458, which overlaps with 1.2457 cluster support. Above 1.2630 will turn intraday outlook consolidative first.
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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