Brace Yourselves:
The bears are coming…
“USD Non-Farm Employment Change: +292K v +203K expected.”
After raising rates at the beginning of the month, for the Fed to see an excellent headline number like that must have felt good. On the surface that might have been the case, but digging a little deeper into the numbers maybe suggest that things aren’t quite as rosy as they might seem.
“USD Unemployment Rate: 5.0% v 5.0% expected.”
“USD Average Hourly Earnings m/m: 0.0% v 0.2% expected.”
Most notably the print in wages was disappointing. This was most probably down to seasonal hiring in temporary positions which obviously won’t be there come January onwards, therefore affecting the headline number.
EUR/USD Daily:
Click on chart to see a larger view.
The huge hammer on the EUR/USD is the above story shown in price, with traders buying USD on the number and then selling as the news starts to digest. Human behaviour in markets is amazing, huh!
Turning our attention to the US S&P 500 futures chart that we highlighted 1 week ago today, you can see that the short term channel snapped hard and price quickly had the rug pulled out from underneath it to end the week with its worst 5 day start to a year in the history of the contract. Wow.
S&P 500 Daily:
Click on chart to see a larger view.
I’ve included a possible level of support to keep an eye out for through the day, drawing a simple parallel line from the major bullish weekly trend line that was broken and re-tested at the end of last year.
Chart of the Day:
But what about the S&P/ASX 200 index futures market, or the SPI200 on your Vantage FX MT4 platform? Well the locals didn’t escape lightly, ending with the worst start to a year ON RECORD. Today’s open should be interesting for the SPI, with the US lead pointing to further pain.
SPI 200 Daily:
Click on chart to see a larger view.
Taking a look at the daily chart, you can see just how brutal last week’s price action was! Price fell very nicely off a zone that had previously reacted in both directions and now is sitting at the bottom of a little consolidation range.
SPI200 Weekly:
Click on chart to see a larger view.
I’ve included the weekly chart for context, showing that the major bullish trend line is in jeopardy. On these major weekly trend lines that I talk about being subjective, I wouldn’t be looking to sell any sort of break too soon. It’s a long term bullish trend and there will definitely be buyers lurking to snap up any latecomers to the short term bearish party.
Don’t be that guy…
On the Calendar Monday:
JPY Bank Holiday:
Japanese banks will be closed in observance of Coming-of-Age Day.
“Coming of Age Day is a Japanese holiday held annually on the second Monday of January. It is held in order to congratulate and encourage all those who have reached the age of majority (20 years old over the past year, and to help them realize that they have become adults.”
AUD ANZ Job Advertisements m/m:
While today’s job advertisements data is actually only a third tier release, I have included it here as we have Australian employment data to be released on Thursday. As we head toward the end of the week, traders will be looking for clues in today’s number on which way to best position themselves.
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