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Market Wire Update:
The NFP Fiasco
Forex Trader Note: The U.S. NFP report printed at -85K, with a net revision of negative -1K over the last two reports. The Unemployment rate posted at 10%, and in reaction S&P futures have hit the floor, with Usd is moving lower initially. The report is very mixed, with no real increase in weekly hourly rates, and the Household survey is way out of line with the Payroll survey; the point to note is the word 'Survey'; this report is in-line with the more realistic view given by the ADP and weekly Initial Jobless Claims, that are not surveys. This sets up good tests of the 4 hour chart ranges on the majors, and will offer a more reliable read once the Wall Street cash market gets underway.
Once again, the NFP has done nothing to create a clear picture, and the estimated parts of the BLS report create a lot of noise. It will be hard for anybody to put a positive spin on these numbers, and once again we go from famine to feast on the Non-farm Payroll Circus. After all of this, 25 million Americans are still looking for work, and 11% of Americans are still relying on food stamps. The ticker-tape parade from December looks to be rather sobering right now.
Canadian employment data revealed an unchanged Unemployment Rate at 8.5%, with the number of jobs created posted at -2K, compared to last month's +79K, and less that the expected +20K read. The report from Statistics Canada revealed a mild swing change in employment sectors. The initial long tests on USD/CAD set in motion an overall bout of long-Usd orders that are still trying to test where fair value is placed.
Only trade the Usd after pre-determined price points are hit, if anything at all is being considered on Friday. Take the 30 minute chart candles from 08:30 EST and place a Fibonacci study on them, then wait until the next 30 minute candle completes. Watch how close the 23, 38, 50, and maybe even the 62% areas get hit, and once the second candle has closed, the market will have revealed where the orders are, for a trade to be possibly executed. Do not jump in; trade the momentum not the moment.
Macro Minute:
Global equity trends are still long on the 4 Hour reads below, and are just starting to show over-extended momentum and order flow reads. Global commodities are reversing off overbought in the near-term. This leads to continued questions on Usd direction and strength as the first week of 2010 unfolds. The 4 hour reads below offer as mixed a picture as a forex trader could see, and one that is crying out for momentum, order flow, and sentiment to hit the market.
The thing to note is that the long-Usd near-term read is against the overall trends on the Daily charts of each pair, and that indicates that a swing point or a reversal is playing out right in front of us. The major pairs really are very mixed in their Usd outlooks.
Keep an eye on expectancy in the near-term; the daily average trading ranges, across all markets, are very low. The indication is that 0.5% of daily movement in total is all that can be expected at the moment from any asset class, reflecting the fact that one or two 4 hour time-frames are housing most of the daily price action.