NFP Impresses With 321K, USD Strength Resumes Dec. 8, 2014
NFP Pops Above 300K, Real Recovery?
With a NFP print above 300,000 one has at least one good reason to believe the recovery is real. To be honest I would be more impressed with creating 400K jobs for a few months straight. Not only because the 300K just covers all the new people coming into the work force plus some. Therefor the ones that have left the work force and come off unemployment (not counted anymore) will be starting to get some work if they are printing 400+K figures for several months in a row. For now I wont get into the importance of paying them a living wage, of which all the part timers never get and we all know how recent NFP reports have been skewed by extra ordinary high percentages of part time jobs created. Having said that as I watched some financial news programs over the weekend even RT (Russia Today) seemed to be happy with the report and showed they thought the recovery was real. I still have my doubts but in such cases would be happily wrong.
EUR/USD Closes below 1.2300
As long as the data from the US keeps improving the USD will keep up the push since the Fed will be expected to raise interest rates sooner rather than later. I still think they have little room to do so considering the US will not be able to afford to service its debt should interest rates rise more than a couple percentage points. Not to mention what it will mean for stocks as all the money chasing yield leaves for safer asset classes.
Today I will be bias for the next push down on the EU looking for a set up at the 1.2309 level first but since the NY/London overlap highs are at 1.2323, if they want to run stops they will push there. The potential for a long is there as well at Fridays lows but I will need something clear to change my short bias and prefer to see a clean stop run first.
GBP/USD Tests 1.5559
The NFP figures also pushed the GBP/USD from its range to test down to the next significant daily level at 1.5559 this morning. As usual I will be suspect of the false conviction but this does qualify as the first push from the range so I will have the bias for the second. If it can manage to do so today or tomorrow then it will open the door to the next significant daily level down at 1.5433 but will likely be held up at the monthly low at 1.5500 first. Having said that if we do continue to see bad data from the Euro Zone and/or the ECB gets the go ahead to print more Euros we have a better chance of seeing this pair get stuck in a range as last week and more probable moves opposite EU moves as the EUR/GBP takes the brunt of Euro weakness.
I will be bias for the short here today as well with the 1.5603 having the best probability. I will be open for the long with a stop run to the current lows at 1.5560 while watching to see that the early conviction is true. However again the set up will need to be great to change my bias.
EUR/JPY Runs second push
The NFP release did make the EUR/JPY spike to the downside with the EU to begin with on the NFP release Friday, however the Yen weakness eventually kicked in dragging it up with the USD/JPY at the end of the day. I will have a bias to get the third push today but wouldn’t be surprised of some Euro weakness holds it back as well. I doubt it will reverse but does have a good chance of holding a range while the EU and UJ run opposite directions. There was just a nice set up at the Friday close while the GJ and UJ hit levels as well. I’m still hoping for a decent pullback to enter long but don’t want to rely on EU weakness for it. The trap on the UJ wasn’t good at all making me want a darn good entry to take the long here. Otherwise I will wait for the London session. The best level for a long during London is at 149.10 but with a 55 pip Asian range the Asian lows are valid at 149.21 Otherwise they may test down to Thursdays highs on Euro weakness before making the next push during NY or tomorrow.
Before I Get To The News
In light of having to prep for the second Super Typhoon in two years to hit the Philippines. Luckily this one hit some cold ocean waters and weakened before hitting land. Never the less at its full strength was even stronger than the one last year that was the strongest wind speed in a typhoon, hurricane or cyclone EVER RECORDED. Considering they way they measure strength, (wind speed) the change from a category 4 to 5 being a 15mph increase in speed, typhoon Yolanda last year was well into a category 6 if there was one. This one was stronger and the Philippines was only saved by a cooler ocean taking strength just before land fall. In other words we got lucky. Having said that I wanted to share a video form Chris Martensen Crash Course I watched this morning. In short Humanity needs to collectively PULL ITS HEAD OUT if we don’t want to cause and be part of the next mass extinction event that has already begun in several areas of the ecosystem.
Also check out the condensed version of the full Crash Course at http://www.peakprosperity.com/crashcourse/accelerated
Also a must see
Forex News Today
The news events are quiet today with only German Industrial Production early in the day. Expected to drop down to .2% from 1.4 leaves a good possibility for a drop below zero. If that happens the Euro weakness should kick in giving the second push on the EU while the EJ holds a range or even drops. Since there isnt any JPY news today or tomorrow the Yen weakness may subside for now adding to any EJ drop.
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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