American job figures came out very confusing. After some choppy trading, the market focuses on the bright side of the data and the dollar continues to rally.
Note: This was initially written at 14:15 GMT. I’ll update this post as events unfold.
Non-Farm Payrolls didn’t deliver a positive number. The US job market lost 20,000 jobs. The negative number was supposed to be the headline, but the Unemployment Rate stole the show with a drop from 10% to 9.7%.
This 0.3% drop in unemployment rate is significant. It’s also a return to the single-digit unemployment rate which is also meaningful in a psychological manner.
Forex market action
EUR/USD began by falling, and then turned up. The move stopped below the all-important 1.3750 line. EUR/USD fell below this important level many hours before the release of the NFP, and didn’t manage to regain this level since then.
The failure to rise back above this level means to me that the direction of EUR/USD is down. The dollar was strong throughout the week, and continues to be strong.
Also other currencies are losing ground to the dollar following the release.
In addition to the fresh data, last month drop was revised to the downside – a loss of 158,000 jobs instead of 85,000 that was initially reported. November’s gain in jobs was revised upwards once again – a gain of 64,000 jobs instead of 4,000 that was reported last month. More confusion..
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