Currency Updates:
AUD/USD the 200-HMA turned into support overnight as Europe bought the dip down to the average. The pair rallied & sat just above 0.8140 into NY’s open and into the jobs report. Whippy price action ensued post-data release but bulls eventually reigned as the market focused on the miss to average hourly earnings. this saw US yields and the USD sink. AUD/USD spiked higher. The lift got a boost from AUD/NZD breaking above 1.0435/40 resistance and a well followed US bank’s tech team establishing a long AUD/USD position. The pair pierced 0.8200 and little pullback was seen as the pair held near the session’s high late in the day. Key s-t resistance in the 0.8215/20 area is now under threat and may break soon. RSIs are now biased up and yield spreads have begun widening. A break of that zone likely sees more short covering and the ensuing squeeze could potentially reach 0.8375/0.8400 resistance.
EUR/USD Tight ranges held in Europe and the pair sat just below 1.1820 hourly resistance into the US jobs report. Wild swings ensued after the release. The above f/c NFP saw the pair spike down initially but the average hourly earnings miss was noted and the pair bounced towards 1.1830. Sellers emerged and a trip down to 1.1762 was made. Further losses couldn’t be made though. The front of the of the US yield market saw rates tumble. This sent the USD broadly lower. EUR/USD lifted again. The pace of the rise accelerated as USD/JPY crashed through 118.75/80 support. EUR/USD took out the post-data reaction high and eventually made a 1.1846 high. Offers into s-t res near 1.1850/60 capped the gains but little pullback was seen as the pair sat just below the lows late in the day. There is some risk bears might get squeezed. RSIs are deeply oversold and yield spreads are narrowing a bit. Should 1.1860 get cleared stops likely get run. The 1.1895/00 level is then targeted followed by 1.1969/1.2006 where the highs of Jan 6 & 5 as well as the 21-DMA sit.
USD/JPY A very brief USD/JPY rally on the above-f/c NFPs was followed by a plunge to new session lows at 118.42 when the second assessment of the jobs report sent Tsy yields and stocks into retreat. Worrying HLs out of France and somewhat dovish Fed speakers added to the risk & USD-off theme. N225 futures fell with other major indices, though the worst losses were in Europe, which, along with fresh ECB QE speculation, was enough to take EUR/JPY below its 200-DMA at 140.31, but not below the 61.8% of the Oct-Dec rise at 140.12 thus far. CAD/JPY was a standout loser today on renewed oil selling and weak Can econ data. It’s threatening the daily Cloud base & 50% of the Oct-Dec rise, both at 99.68. The weekly Kijun is at 99.60. GBP/JPY is probing several supports at 178.83. A holiday on Monday in Japan may subdue yen dealings, but the overall fundamental flow pattern favors outbound investment, partly offset by a better Trade balance amid tumbling energy prices. This suggests any early-year USD/JPY corrections would find excellent support waiting in the wings.
Looking Ahead – Economic Data (GMT)
• CN M2 Money Supply YY* Dec f/c 12.5%, 12.3%-prev
• CN New Yuan Loans* Dec f/c 852.7b, 852.7b-prev
• CN Outstanding Loan Growth* Dec f/c 13.8%, 13.4%-prev
• 00:30 AU ANZ Newspaper Job Ads Dec -5.4%-prev
• 00:30 AU ANZ Internet Job Ads Dec 0.9%-prev
• 00:30 AU Housing Finance Nov f/c 2%, 0.3%-prev
• 00:30 AU Invest Housing Finance* Nov 1%-prev
• 01:30 CN CPI MM* Dec 0.29%, -0.2%-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
