We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • The US Dollar remains in consolidation mode against the Philippine Peso and Indian Rupee. Will the Singapore Dollar weaken as $USDSGD rising support holds ahead? Find out from @ddubrovskyFX here: https://t.co/HZ8Loqj3Ey https://t.co/6PCFkdj3ka
  • Follow @DailyFXedu for your regular #webinar updates with @DailyFX analysts and catch up on the webinars you missed. https://t.co/Da10QUg9r1
  • Greed has proven to be a hindrance more than assistance for traders. How does greed lead to #FOMOintrading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/Le8Qx6OOwV
  • $GBPUSD at the moment break-even straddles = 152pips meaning that for option traders to realize gains, the spot price must see a move greater than 152pips. Get your market update from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/RXCBwHGluG
  • $EURGBP has fallen over 6% since August and is now rapidly approaching a critical support level not reached since May. Will a break below accelerate the aggressive selloff? Find out from @ZabelinDimitri here: https://t.co/CBM8Fg7vM0 https://t.co/0yDnEpzQqR
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
  • How can confidence in trading help with avoiding #FOMOintrading? Find out from @WVenketas here: https://t.co/MY7j9ISn4S https://t.co/n7XwfiDZz2
NFP Misses Headline Number, Decent Internals; USD Bid

NFP Misses Headline Number, Decent Internals; USD Bid

2016-02-05 13:48:00
James Stanley, Currency Strategist
Share:

Talking Points:

- US economy added +151K jobs in January, -39K below the forecast of +190k.

- Unemployment rate drops to 4.9%, wage growth at +2.5% y/y versus expectation of +2.2%.

- EURUSD traded between $1.1142 and $1.1253 after the data.

The January US labor market report came in under expectations with a print of +151K jobs added to American payrolls for the month of January. This was -39k below expectations, and -43k below our own regression model estimates. After last month’s outsized beat, markets experienced significant turbulence throughout the month of January and this was the first look that we get at how much of an impact that may have had on the American labor force. The increase in wage growth and the drop in the unemployment rate are the positive take-aways from this morning’s report despite the miss on the headline number, and some sources are already allocating that miss towards a response to holiday hiring. As seasonal jobs get filled for the holidays, those payrolls come off the books in January and can offset newly added jobs. Those jobs, by nature, are low-paying, so the uptick in wage growth is encouraging.

Here are the data that’s bringing volatility into the Forex market this morning:

- USD Change in Nonfarm Payrolls (JAN): +151K versus +190K expected

- USD Unemployment Rate (JAN): 4.9% versus 5.0% expected.

- USD Average Hourly Earnings (JAN): +2.5% versus +2.2 expectated.

- USD Labor Force Participation (JAN): 62.7% versus 62.6% expected.

The net result thus far has been USD-strength, and we’ve seen a rather vigorous bounce off of a long-term trend-line. This trend-line came into play yesterday and we discussed it in the morning market talk. During NFP this morning, the US Dollar ran down for another test of this trend-line, and has since set a higher-low. This can be a bullish connotation that the weakness in the US Dollar throughout this week may have met it’s end, or at the very least is at a very interesting turning point as the United States remains as one of the few economies in a position that may actually raise rates in the next year. This morning’s report did nothing to diminish that prospect, and given the massive reduction in rate hike expectations that we’ve seen this week, this morning’s report may actually increase those probabilities given the reduction in the unemployment rate and the increase in wage growth.

Chart 1: USDOLLAR Index Daily Chart: January 2015 to Present

NFP Misses Headline Number, Decent Internals; USD Bid

Created with Marketscope/Trading Station II; prepared by James Stanley

Missed today's US Nonfarm Payrolls report? Watch the webinar archive of today's live event coverage with Currency Strategist Christopher Vecchio.

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.