2013-04-06 14:06 (UTC)
XE Market Analysis
The dollar sagged broadly in the aftermath of the much weaker NFP print. EUR-USD spiked up to 1.3000 from near 1.2920, while USD-JPY eased to 95.75 from 96.25. USD-CAD popped toward 1.0200 from 1.0150 on the back of the softer jobs prints from both sides of the border. Stock futures moved deep into the red, though the risk-off trade did not do the greenback any good at all this week. The February trade deficit narrowed slightly, but was overlooked completely in light of the disappointing employment outcome. After the initial post jobs data moves, the dollar steadied some versus most currencies, and was mixed overall. After the London close, activity dried up and traders called "uncle" for the week.[EUR, USD]
EUR-USD spiked from 1.2925 to 1.3020 in the immediate aftermath of the weak U.S. jobs report. The pairing remained firm and held its gains over 1.3000, peaking near 1.3040. Wall Street cut its losses though remained well under water, which may have helped the dollar a bit lower, as EUR longs attempted to keep it elevated over the 1.3000 area. This will give it chance to test previous highs from late March at 1.3045-50 ahead of further resistance at 1.3075-80 and 1.3100-10.[USD, JPY]
USD-JPY buy stops were filled behind offers up to 97.00 and through the 21-dma at 97.20. The EUR-JPY sprint higher through March highs effectively lifted USD-JPY out of 96.70, though U.S. accounts had positioned for further upside after the post-payrolls dip. Macro and real money types were aggressive buyers under 96.00 and only option barriers stand in the way of further gains. Our Japanese sources think there is potential for a 100 print in the coming weeks as BoJ action and increasing uncertainty in Korea fuels further USD-JPY upside.[GBP, USD]
Cable triggered large buy stops just above 1.5275 and 1.5300 after the big U.S. payroll miss. Cable surged more than 80 pips to its best levels since February-20. There was some modest resistance at 1.5340, where order book flow is tipped, while the influence of option accounts could also feature towards the 1.5350 if the rally has legs. Price action may turn a bit choppy here due to the pace of the upswing since yesterday (1.5035 lows). However, expect more dip buying on any temporary set backs with the intra-day consolidation zone at 1.5220-40 likely to encourage longs.[USD, CHF]
EUR-CHF was supportive ahead of 1.2150, though did dip briefly to near 1.2135 in late trade on Friday. For the most part EUR and USD flows have effectively left the cross in a narrow range, as prices chopped between 1.2135 and 1.2170. USD-CHF took a hit, along with the dollar in general after the soft U.S. employment report, with that pairing sliding to near 0.9310, after peaking over 0.9330 in Europe.[USD, CAD]
USD-CAD shot higher on the mix of data from both sides of the border, where weak jobs reports from the U.S. and Canada, along with a Canadian trade deficit weighed on the loonie. USD-CAD peaked over 1.0230, after idling near 1.0125 though most of the overnight session, and at levels last seen on March 26. From there though, a much improved Ivey PMI outcome, and the paring of some Stock market losses allowed USD-CAD to slip back under 1.0170.