USD gets support from November’s US employment report

The USD got some support on Friday as the US employment data for November were better than expected. Characteristically the Non-Farm Payrolls (NFP) figure came in at 199k instead of 180k expected and the unemployment rate dropped to 3.7% despite being expected to remain unchanged at 3.9%. Despite the possibility of a seasonal effect, overall, the data tend to highlight once again the resilience and tightness of the US employment market. The release may harden the Fed’s hawkish stance and contradict the market’s expectations for an early rate cut. It’s characteristic that Fed Fund Futures, before the release implied the possibility of 5 rate cuts in the next year and after only 4. Nevertheless, US stock markets ended Friday in the greens, while gold stuck to the negative correlation with the USD and edged lower and is currently below $2000 per ounce.

USD/JPY rallied on Friday and during today’s Asian session, breaking the 144.45 (S1) resistance line, now turned to support. We tend to maintain a bullish outlook for the pair, as long as the upward trendline remains intact. Yet there are some stabilisation signs from the RSI indicator, while the upward trendline is quite steep and may need a correction lower. Should the bulls maintain control over the pair, we may see USD/JPY breaking the 146.30 (R1) resistance line and aim for the 148.25 (R2) resistance level. Should the bears take over, we may see the pair breaking the prementioned upward trendline, in a first signal that the upward movement has been interrupted, breach the 144.45 (S1) support line and aim for the 143.00 (S2) support level.

AUD/USD remained in a sideways motion between the 0.6620 (R1) resistance line and the 0.6515 (S1) support line. We tend to maintain our bias for the sideways motion to continue for the time being, yet note that the RSI indicator dropped below the reading of 50 implying some bearishness in the market sentiment. Should a selling interest be expressed by the market, we may see the pair breaking the 0.6515 (S1) support line and aim for the 0.6400 (S2) support level. Should the pair find extensive buying orders along its path, we may see the pair breaking the 0.6620 (R1) resistance line and aim for the 0.6725 (R2) resistance nest.

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Today in the European session, we note the release of Norway’s and the Czech Republic’s CPI rates for November and as tomorrow’s Asian session is about to start we get New Zealand’s Electronic Card Retail Sales for November. Later on, we note that the RBA Governor Michell Bullock is scheduled to speak while we also note the release of Australia’s December consumer sentiment and Business data for November as well as Japan’s Corporate goods prices for November.

As for the rest of the week:

On Tuesday we get UK’s October employment data, Norway’s GDP rate for October, Germany’s ZEW indicator for December and November’s US CPI rates. On Wednesday we get Japan’s Tankan indexes for Q4, UK’s October GDP rate, Eurozone’s industrial output for October the US PPI rates for November, New Zealand’s GDP rate for Q3 and we highlight the release of the Fed’s interest rate decision. On Thursday we get Japan’s machinery orders for October, Australia’s employment data for November, Sweden’s CPI rates for the same month, the US weekly initial jobless claims figure, the US retail sales for November, Canada’s manufacturing sales for October and note the release of SNB’s, Norgesbank’s, ECB’s and BoE’s interest rate decisions. On Friday, we get Australia’s, Japan’s, Germany’s, France’s, Eurozone’s, the UK’s and the US preliminary PMI figures for December and we also get China’s industrial output for December and the US industrial production for November.