Mid-Day Report: Dollar Steady after Mixed NFP, Canadian Dollar Rebounds
Dollar is steady in tight range after mixed non-farm payroll report. US job market contracted -20k in January versus expectation of 20k expansion. December's figure was also revised down from -85k to -150k. Unemployment rate dropped from 10.0% to 9.7%, which was the best number in five months. However, that was largely due to a sharp increase in the number of people giving up looking for work as number of 'discouraged job seekers' rose to 1.1 million in January from 734,000 a year ago.
Canadian employment data showed much better than expected expansion of 43k in January, the fourth gain in six months. Unemployment rate also dropped to 8.3%. Market's initial reaction was muted as traders were cautious ahead of US NFP. Nevertheless, USD/CAD dives sharply as NFP clears the air.
Other data released today saw UK PPI came in stronger than expected with input prices rose 2.0% mom and output prices rose 0.3% mom in January. Germany industrial production dropped -2.6% mom in December. Japan leading indicator rose to 94 in December.
USD/CAD Mid-Day Outlook
Daily Pivots: (S1) 1.0641; (P) 1.0696; (R1) 1.0797; More.
USD/CAD's break of 1.0678 minor support suggests that an intraday top is formed at 1.0779. Some more retreat might be seen but we'd expect strong support from 1.0544 support to bring rally resumption. Prior break of 1.0744 resistance confirm that whole correction pattern from 1.0851 has already finished at 1.0223. Above 1.0779 will target a retest of 1.0851 resistance next.
In the bigger picture, we're still favoring the case that whole medium term fall from 1.3063, which is viewed as a correction to long term rise from 0.9056, has completed at 1.0205 already. Break of 1.0851 will confirm this case by completing a double bottom reversal pattern (1.0205, 1.0223). In such case stronger rally should be seen to 61.8% retracement of 1.3063 to 1.0205 at 1.1971 at least. Also, in such case, we'll tentatively treat rise from 1.0205 as resumption of the whole up trend from 2007 low of 0.9056 and focus on the structure of the rise from 1.0205 for confirmation.
Economic Indicators Update
| GMT |
Ccy |
Events |
Actual |
Consensus |
Previous |
Revised |
| 00:30 |
AUD |
RBA Quarterly Monetary Policy Statement |
|
-- |
-- |
|
| 05:00 |
JPY |
Leading Index Dec P |
94 |
93.7 |
91.2 |
91 |
| 09:30 |
GBP |
PPI Input M/M Jan |
2.00% |
0.70% |
0.10% |
|
| 09:30 |
GBP |
PPI Input Y/Y Jan |
8.40% |
6.50% |
6.90% |
7.40% |
| 09:30 |
GBP |
PPI Output M/M Jan |
0.40% |
0.30% |
0.50% |
|
| 09:30 |
GBP |
PPI Output Y/Y Jan |
3.80% |
3.70% |
3.50% |
|
| 09:30 |
GBP |
PPI Output Core Y/Y Jan |
2.50% |
2.60% |
2.60% |
|
| 11:00 |
EUR |
German Industrial Production M/M Dec |
-2.60% |
0.60% |
0.70% |
|
| 12:00 |
CAD |
Net Change in Employment Jan |
43K |
15.0K |
-2.6K |
|
| 12:00 |
CAD |
Unemployment Rate Jan |
8.30% |
8.50% |
8.50% |
|
| 13:30 |
USD |
Change in Non-Farm Payrolls Jan |
-20K |
20K |
-85K |
-150K |
| 13:30 |
USD |
Unemployment Rate Jan |
9.70% |
10.00% |
10.00% |
|
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