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AUDUSD: ⬆️ Buy

• AUDUSD broke resistance zone
• Likely to rise to resistance level 1.7200

AUDUSD currency pair recently broke the resistance zone between the resistance level 0.7075 (top of wave iii from January) and the two daily up channels from November and April of 2025.

The breakout of this resistance zone accelerated the active impulse waves 3 and (C).

Given the clear daily uptrend, AUDUSD currency pair can be expected to rise to the next resistance level 1.7200 (forecast price for the completion of the active impulse wave 3).

CHFJPY: ⬇️ Sell

• CHFJPY broke 2 daily up channels
• Likely to fall to support level 197.50

CHFJPY currency pair recently reversed down with the daily Japanese candlesticks reversal pattern Evening Star from the resistance area between the key resistance level 204.00, daily up channel from January and the upper daily Bollinger Band.

The downward reversal from the resistance level 204.00 started the sharp downward correction which broke the aforementioned up channel from January and the weekly up channel from last October.

CHFJPY currency pair can be expected to fall to the next support level 197.50 (low of the previous minor correction from January).

USDCAD: ⬆️ Buy

• USDCAD reversed from long-term support level 1.3545
• Likely to rise to resistance level 1.3725

USDCAD currency pair recently reversed from the support area between the strong long-term support level 1.3545 (which has been reversing the price from June) and the lower daily Bollinger Band.

The upward reversal from this support zone continues the active short-term impulse wave 3 of the intermediate impulse wave (1) from last month.

Given the strength of the support level 1.3545 and bullish US dollar sentiment seen today, USDCAD currency pair can be expected to rise to the next resistance level 1.3725.

Markets

US payrolls defied the (near-)boldest of expectations as well as broke the downward spiral that originated from last week’s second-tier labour market data. January job growth came in double the 65k expectations. Narrowed down to the private sector, employment even grew 172k. But growth wasn’t particularly broad-based, with a big skew towards health & social assistance sector (+124k). Professional business services came in second (+34k) while transportation & warehouse, IT and financial activities all shed jobs. In contrast, manufacturing (+5k) printed job increases only for the second time in the last two years (the previous occasion being November 2024). The unemployment rate unexpectedly ticked down to 4.3% from 4.4% even as the participation rate rose to 62.5%. Wages grew slightly faster than expected on a monthly basis (0.4% m/m) but that came after a downward revision to the December print. The January job report edition came with the annual benchmark revision, leading to a significant alternation to the job numbers for the period stretching April 2024 through March 2025. The -862k downward adjustment was broadly in line with the -825k expected though. Including the yearly seasonal adjustments which the BLS recalculates each January, average job growth for 2025 amounted to just +15k instead of +49k prior to the revision. Either way, today’s numbers wrongfooted markets who were increasingly betting on faster and more Fed rate cuts. It resulted in a kneejerk upleg in US yields ranging between 3.5-7 bps in a textbook bear flattening move. The timing for a Fed rate cut is being pushed backward again from June to July. The next key input that might affect expectations will be Friday’s CPI report. European/German rates followed the US intraday movement, be it from a distance. Net daily changes amount to no more than 1 bps at the front end of the curve. The US dollar strengthened but much of the move faded pretty soon. EUR/USD hit a low of 1.1833 before recovering to 1.187 currently. DXY whipsawed only to trade little changed around 96.88. JPY remains in a sweet spot with solid gains this week so far pushing USD/JPY to 153.8. US stock markets take the upside surprise well and open around 0.5% higher.

News & Views

The Mexican peso and the Canadian dollar in early afternoon trading were captured in some kind of an air pocket. The USD/MXN pair jumped from the 17.13 area to trade near 17.21 going into the US payrolls release. USD/CAD made a similar move rising from low 1.35 area to trade near 1.356 before the payrolls. The moves came after press agency Bloomberg reported, referring to people familiar with the matter, that US president Trump in private discussions raised the idea of exiting the North American trade pact (USMCA) is set for a mandatory review before a possible extension on July 1. Bloomberg also referred to contexts in the office of US trade representative Jamieson Greer, indicating that simply rubberstamping the 2019 terms of the agreement was not in the national interest of the US, suggesting that more profound changes are on the table as the negotiations develop. Both USD/CAD and USD/MXN extended gains after stronger than expected US payrolls (cf supra).

The ECB today published its wage tracker, which covers active collective bargaining agreements up to mid-January. The tracker indicates negotiated wage growth with smoothed one-off payments at 3.2% in 2025 and 2.4% in 2026. For 2026 smoothed indicator was 0.1% higher compared to the December 2025 release. For 2026, the indictor points to 2.1% wage growth in the first half of the year and 2.7% growth in H2, mostly mirroring lager one-off payrolls in the previous years (2024). The ECB in the press release signals that it still sees forward-looking information in line with negotiated wage growth that might off at below 3% by the end of 2026. If realized, these kind of wage growth levels might support the case for the ECB to hold the policy rate near a 2% neutral level.

Daily Pivots: (S1) 1.3524; (P) 1.3552; (R1) 1.3582; More...

USD/CAD's break of 1.3575 minor resistance suggests that corrective pattern from 13.480 is extending with another rising leg. Firm break of 55 4H EMA (now at 1.3620) will bring stronger rebound to 1.3723 resistance. But upside should be capped by 55 D EMA (now at 1.3763). On the downside, break of 1.3480 low will resume larger down trend from 1.4791 to 61.8% projection of 1.4791 to 1.3538 from 1.4139 at 1.3365.

In the bigger picture, price actions from 1.4791 are seen as a corrective pattern to the whole up trend from 1.2005 (2021 low). Deeper fall could be seen as the pattern extends, to 61.8% retracement of 1.2005 to 1.4791 at 1.3069. For now, medium term outlook will be neutral at best, until there are signs that the correction has completed, or that a bearish trend reversal is confirmed.

Daily Pivots: (S1) 1.1878; (P) 1.1904; (R1) 1.1920; More….

Intraday bias in EUR/USD is turned neutral with current retreat. On the upside, above 1.1928 will target a retest on 1.2081 high. Decisive break there and sustained trading above 1.2 psychological level will carry larger bullish implications. On the downside, however, sustained trading below 55 D EMA (now at 1.1749) will raise the chance of reversal on rejection by 1.2, and target 1.1576 support for confirmation.

In the bigger picture, as long as 55 W EMA (now at 1.1470) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will add to the case of long term bullish trend reversal. Next medium term target will be 138.2% projection of 0.9534 to 1.1274 from 1.0176 at 1.2581. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Daily Pivots: (S1) 153.53; (P) 154.91; (R1) 155.76; More...

Intraday bias in USD/JPY is turned neutral first with current recovery. As noted before, price actions from 159.44 are seen as a consolidations pattern. In case of another fall, downside should be contained by 38.2% retracement of 139.87 to 159.44 at 151.96 to bring rebound. On the upside, sustained break of 55 4H EMA (now at 155.44) will bring stronger rebound towards 157.65. However, sustained break of 151.96 will argue that it's reversing the rise from 139.87 already.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 151.68) holds. However, sustained break of 55 W EMA will argue that the pattern from 161.94 is extending with another falling leg.

Daily Pivots: (S1) 1.3621; (P) 1.3660; (R1) 1.3682; More...

Intraday bias in GBP/USD remains neutral for the moment. On the upside, firm break of 1.3732 resistance will suggest that pullback from 1.3867 has completed as a correction at 1.3507. Retest of 1.3867 should be seen first. Firm break there will resume larger up trend towards 1.4284 key resistance. On the downside, however, sustained trading below 55 D EMA (now at 1.3497) will raise the chance of larger scale correction, and target 1.3342 support for confirmation.

In the bigger picture, rise from 1.0351 (2022 low) is resuming by breaking through 1.3787 high. Further rally should be seen to 1.4284 key resistance (2021 high). Decisive break there will add to the case of long term bullish trend reversal. For now, outlook will stay bullish as long as 1.3008 support holds, even in case of deep pullback.

Non-farm payrolls rose 130k in January, well ahead of the consensus forecast of 65k.

• This morning's release also included more comprehensive benchmark revisions, which are done annually to better align the establishment survey to the observed employment counts reported in tax filing data. The revisions showed that the level of employment as of March 2025 was lower by 898k.
• The Bureau of Labor Statistics also revised its seasonal adjustment factors (dating back to 2021) as well as the birth/death factors used to scale payroll changes up or down depending on the estimated rate of business formation. These revisions showed that payroll growth over the course of 2025 was revised lower by a total of 403k positions, though the bulk of the downward revisions were concentrated in H1-2025. In Q4-2025, payrolls were revised higher by 16k.

Private payrolls rose by a robust 172k in January, well above the 44k averaged over the prior six-month period. The bulk of January's job gains were concentrated in education and health care (+137k), while professional & business services (+34k) and construction (+33k) also chipped in. The federal government shed 34k positions.

In the household survey, a significant increase in civilian employment (+528k) eclipsed a smaller gain in the labor force (+387k), pushing the unemployment rate down a tick to 4.3%. However, the response rate was lower than usual last month because of inclement weather across much of the U.S..

Average hourly earnings (AHE) rose 0.4% month-on-month (m/m), following a smaller gain of 0.1% m/m in December. On a twelve-month basis, AHE held steady at 3.7%.

Key Implications

Well, that was unexpected! Not only did hiring activity turn meaningfully higher in January – with private payrolls rising at its fastest monthly pace in over a year – but the unemployment rate also ticked lower for a second consecutive month.

While we don't want to put too much emphasis on one data point, it would appear that the downside risks to the labor market have receded. Amid a backdrop of still elevated inflationary pressures, the Fed can be patient in its approach to further policy easing. Following this morning's release, Fed futures have pushed out the timing of the next rate cut to July (previously June), while the 10-year yield is up about 6 basis points to 4.2%.