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NFP Beats Expectations Until We Look At The Details, Jan 12, 2015

Fridays NFP Better, Revised Better For November, All Good Until We Look At The Details

Last weeks NFP numbers look great on the surface. Especially the revision to 353K for November. I am relatively sure thats what caused the initial spike of USD strength but it only took an hour or so to look deeper into the details of the print to find that yet again it was mostly service sector jobs, ie: Waiters and Bartenders accounted for 43,000. In short, meaning they are part time jobs at sub minimum wage earnings. When looked at even deeper it also shows that the average hourly earnings had the biggest loss in 8 years. I have to say that shouldnt surprise anybody with so many of the recently employed at or below minimum wages. The most hilarious was the Unemployment Rate unexpectedly dropped to 5.6% from 5.8 (expected at 5.7). On the surface that is just stupendous one would think right? Well not until you see that the Labor Participation Rate dropped to a 38 year low showing a record almost 93 million people dropping from the labor force. The most percentage wise since December 1977. If memory serves, my parents werent so happy with the state of the US economy back then even though both had jobs.

EUR/USD Makes First Push Up

While this is a clean first push and I will have a bias for the next push up today I am always leery of these early Asia moves as many members know. The chance of them being false moves is high, however with Goldman Sachs forecasting the EU going to parity Friday I expect they are playing the muppets as usual and we could easily see a three push move to test last weeks highs first. I have to say I agree with the parity figure with all the issues facing Europe not even counting the recent terrorist acts. Our hearts and prayers go out to them for that. However the bigger one facing the Euro is the coming Grexit that supposedly Germany thinks they can sustain. At this point my thoughts are it will be less sustainable than letting Greece go before they over threw their government just to keep them in when they should have never been allowed in the Euro in the first place.

The best level for a long here today is at the Asia lows of 1.1846 but only if they leave the Asian box closer to the highs. Otherwise they will likely push to 1.1829 if they do intend the second push today. I will also be open for the short at the Asian highs but will need enough information to chance my bias. If they do show some conviction above 1.1869 they will likely push it to 1.1886 or higher completing the second push.

EUR/USD Hourly chart 1-12-2015

GBP/USD Pushes Up ON NFP As Well

Again I am going to be cautious with taking the long on this pair even with the bias of the first push. It will be interesting to see if the gap open price of 1.5170 can hold during the Asian session. If it cant then the next level to test for a long is Fridays close and if that cant hold this has higher probability of being a false push and the USD strength will continue, more than likely bringing the EU with it. At this point the potential long is at the current Asian lows of 1.5163 but the 1.5150 may hold as well. Otherwise the best short being at 1.5191 but if they do show conviction below 1.5150 then they may also hold at the daily high from Friday but does carry more risk for entry.

GBP/USD Hourly chart 1-12-2015

EUR/JPY Pushes Down, Risk Aversion or USD Weakness

At this point the moves Friday after NFP show a little bit of both. Weakness in the USD and Stocks seem most likely but we will see if that holds true for this week.

With a first push from the chop last week I will be bias for the short here today but if they hold the USD weakness this pair will likely form another range it will hold for now. The best level to short is at 140.43 or just above at last Wednesdays lows. Otherwise they may test as high as 140.71 and the short is still valid. I will be open for the long at the current Asian lows of 140.09 but will need enough information to change the bias for the short.

EUR/JPY Hourly chart 1-12-2015

 

Forex News Today

The calendar is void of any significant news so I will be on the look out for tape bombs. Otherwise they will likely be digesting the NFP figures contemplating on if it will cause the FED to act. If equities drop again we should see more of the same price movement with the possible exception of the EUR/USD if they start getting more concerned about a Greek exit from the Euro Zone

Happy Trading

Chad

MY APOLOGIES FOR THE BROKEN VIDEO OF INSIDE JOB IN THE COMMENTARY. I DIDNT THINK I WAS COPY WRITE INFRINGING WITH AN ITALIAN VERSION ALREADY ON YOUTUBE. HOWEVER YOU CAN STILL WATCH IT AT THIS LINK. STILL A MUST SEE!

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2 Comments

  1. Jerry
    Jerry January 13, 07:16

    NFP figs are good on surface but GU & EU go up was this after the part time jobs were digested?
    Jerry Confused….

    Reply to this comment
    • Chad Tell
      Chad Tell Author January 13, 23:47

      Hi Jerry, Yes not only that but the fact that the drop in unemployment rate being due mainly to the work force participation going down substantially as well. Being at 1977 levels is not good and shows the Unemployment Rate it a joke.

      Chad

      Reply to this comment

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