Daily FX Trading Review: US and Canadian Jobs Data Disappoint – Sept 8, 2014

Daily FX Trading Review: US and Canadian Jobs Data Disappoint - Sept 8, 2014

The US dollar had trouble sustaining its FX trading climb on Friday when the US NFP report came in weaker than expected. The economy added only 142K jobs in August versus the estimated 226K in hiring gains. Meanwhile, the jobless rate still managed to improve from 6.2% to 6.1% while average hourly earnings saw a 0.2% uptick as expected. There are no major reports due from the US economy for today, which suggests that market sentiment might continue to push dollar pairs around.

The euro edged lower to most of its major counterparts towards the end of the FX trading week, as traders adjusted positions to the ECB easing announcements. German industrial production was stronger than expected at a 1.9% gain versus the projected 0.5% uptick but the euro was barely able to gain from this release. German trade balance and euro zone Sentix investor confidence data is due today and more signs of weakness might drive the euro lower.

FX Trading Fundamental Analysis

The pound had a sharp gap lower against its counterparts in the start of this week’s FX trading as the possibility of Scottish independence spelled downbeat prospects for the UK economy. Consumer inflation expectations saw an improvement from 2.6% to 2.8% but did very little to support the pound. UK Halifax HPI is due today and it might print a 0.2% uptick.

The franc lost a lot of ground recently as traders speculated about a potential currency intervention from the SNB, now that EURCHF is edging closer to its 1.2000 FX trading floor. Swiss CPI, retail sales, and jobless rate are all due today and weak data might push the franc lower. The CPI might show a 0.1% decline in prices while retail sales could improve from 3.4% to 3.7%. The jobless rate is slated to stay unchanged at 3.2% for the time being.

Yen pairs gapped down over the weekend but most FX trading gaps have been filled except for GBPJPY. Japanese current account was weaker than expected but the final GDP was unchanged at -1.8% as expected. Japan’s Economy Watchers sentiment report is due today and a downturn in confidence might be negative for the yen.

The comdolls struggled to extend their gains recently as most traders booked profits off their FX trading setups. New Zealand quarterly manufacturing sales slipped by 1.9% for the previous quarter, following a flat reading. Chinese trade balance was stronger than expected, giving the Aussie a bit of a boost. Meanwhile, the weaker than expected Canadian jobs release and Ivey PMI are currently weighing on the Loonie. Hiring fell by 11K instead of increasing by the estimated 10.3K while the manufacturing PMI slipped from 54.1 to 50.9. Canadian building permits is due today.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.