The Non-Farm Payroll came in today for March, and it was a dud pushing the USD back. We knew March employment was a bit off compared to February’s, because of the ADP report on Wednesday. However, the gap between the forecast and the actual release for today’s NFP jobs data was much wider than most expected.
We can see that the jobs data was about half as expected and that the previous reading was revised down dramatically as well. This does not bode well for the USD, which has been strong because the FOMC has been basing its plan to raise rates this year on the strong job market recovery. If the labor market hits a snatch like this for another month, the FOMC might not be able to raise rates this year, and the USD might pare a significant amount of its gains since 2014.
Indeed the initial reactions are bearish for USD.
The EUR/USD was consolidating between 1.08 and 1.09 ahead of the jobs data.We can see the rally above 1.09 and the push towards the 1.1040 highs. If price can close above 1.1050 and eventually holding above 1.09 after a subsequent pullback, we should expect further upside first towards the 1.1270-80 support/resistance pivot. Above that, if we start seeing EUR/USD holding above 1.11, there would be upside risk towards the 1.15 handle and previous key resistance.
The USD/JPY was trying to push above 120, but after the NFP, bears took over and the pair is now falling towards a key support.
As we can see in the 4H chart, USD/JPY was already bearish, despite a rebound at the end of last week and the start of this one. Price is still under the moving averages and a falling trendline.
The pair looks pised to at least test last week’s lows around 118.30. Below, that USD/JPY would expose an even more significant support area around 115.50-116.
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