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Daily Pivots: (S1) 1.1328; (P) 1.1371; (R1) 1.1420; More.....

Intraday bias in EUR/USD remains neutral as it's staying in range of 1.1267/1472. As long as 1.1472 resistance holds, deeper decline is expected in the pair. On the downside, break of 1.1267 will target 1.1215 low first. Firm break there will resume larger down trend from 1.2555 for 1.1186 fibonacci level next. However, considering bullish convergence condition in daily MACD, firm break of 1.1472 will be suggest medium term bottoming and turn outlook bullish for 1.1814 resistance instead.

In the bigger picture, as long as 1.1814 resistance holds, down trend down trend from 1.2555 medium term top is still in progress and should target 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 next. Sustained break there will pave the way to retest 1.0339. However, break of 1.1814 will confirm completion of such down trend and turn medium term outlook bullish.

Daily Pivots: (S1) 1.2718; (P) 1.2765; (R1) 1.2831; More...

No change in GBP/USD's outlook and intraday bias stays neutral. On the downside, sustained break of 1.2661 low will resume larger down trend from 1.4376. Next target will be 1.1946. On the upside, break of 1.2927 will extend the consolidation from 1.26661 with another rise. But even in case of strong rebound, upside should be limited by 1.3316 fibonacci level to bring down trend resumption eventually.

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argues that it's resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.

Daily Pivots: (S1) 0.9886; (P) 0.9938; (R1) 0.9981; More...

Intraday bias in USD/CHF remains mildly on the downside for the 0.9848 support. Firm break there will confirm near term reversal and target target 61.8% retracement of 0.9541 to 1.0128 at 0.9765. On the upside, though, break of 1.0008 resistance will indicate that the pull back from 1.0128 has completed. Intraday bias will be turned back to the upside for retesting 1.0128 high.

In the bigger picture, rise from 0.9541 could have topped at 1.0128. But as long as 0.9541 support holds, we'd still expect rise from 0.9186 to resume at a later stage. Break of 1.0128 will target 1.0342 key resistance. However, break of 0.9541 will pave the way back to 0.9186 low.

Daily Pivots: (S1) 112.19; (P) 112.71; (R1) 113.19; More..

Intraday bias in USD/JPY remains neutral for the moment. With 113.24 minor resistance holds, deeper decline is still expected. On the downside, break of 112.23 will target 111.37 and possibly below. But still, price actions from 114.54 are seen as a consolidation pattern. Hence, even in case of deep decline, downside should be contained by 38.2% retracement of 104.62 to 114.54 at 110.75 to bring rebound. Larger rise from 104.62 is expected to resume later. On the upside, above 113.24 minor resistance will turn bias back to the upside for 114.03 resistance.

In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.76 support holds. However, decisive break of 109.76 will dampen this bullish view and turns outlook mixed again.

• Nov Full-Time Jobs +89,900; Part-Time +4,100
• Canada Nov Avg Hourly Wages +1.7% From Year Ago
• Canada Labor Force +77,200 In Nov From Oct
• Canada Nov Participation Rate At 65.4% vs 65.2% In Oct

Canadian job growth surged last month, exceeding market expectations by a wide margin, as gains in full-time hiring helped push the unemployment rate to its lowest level in more than 40-years.

The Canadian economy added a net +94.1K jobs in November vs. expectations for an increase in employment of +10K.

Canada’s jobless rate fell to +5.6% in November, down from +5.8% in the previous month. Market expectations were for the jobless rate to remain at +5.8%.

Meanwhile, average hourly wage growth decelerated to +1.7% y/y, down from +2.2% in October.

The loonie has rallied aggressively, +0.85% to C$1.3306.

Stateside, U.S Treasury yields and dollar are heading back down after the weaker-than-expected jobs figures (+155K vs. +198Ke). The yield on the 10-year is at +2.883%, after eclipsing +2.90% earlier this morning. The Dollar Index is down -0.2% after rising earlier in the day.

Hiring activity slowed in November, with nonfarm payrolls rising by 155k positions. The soft reading comes after a 237k gain in October (revised down from 250k). Combined with hurricane-weakened readings earlier in the fall, hiring has slowed to 195k jobs per month on average over the past six months.

The disappointing headline figure is somewhat mitigated by the unemployment rate holding at its cycle low of 3.7% for the third consecutive month. The overall labor force participation rate also held on to its October gain, and is at 62.9% -- broadly unchanged over the past year.

Hiring activity slowed for both the goods and services sides of the economy. Areas of strength included healthcare (+32k), manufacturing (+27k) and transportation and warehousing (+25k). The slowdown in hiring was broad based.

The closely watched measure of wage growth – average hourly earnings – rose 0.2% on the month, as markets were expecting. Wages grew at a 3.1% pace over the past 12 months, the same as in October.

Key Implications

This number will not help to alter the pessimistic mood on financial markets this week, but a slower pace of hiring was bound to happen. As labor markets tighten, it gets tougher for employers to find people to hire. It is hard to pin slower hiring on any one idiosyncratic factor or industry. Hiring has averaged 195k new jobs per month over the past six months, which marks a slowdown from 215k-ish pace seen through much of 2018. But, it is still above the trend through most of 2017, and is actually not too bad given the mature phase of the economic cycle.

The Federal Reserve is not likely to put too much weight on a one-month moderation in hiring activity, and will likely focus on broader measures of labor market slack, like the unemployment rate or wage growth, which remained steady in November. We see a December rate hike as largely a done deal. However, it is undeniable that core inflation has lost momentum in recent months. While we expect price pressures to pick back up in the coming months, above-target inflation is less of a threat for the Fed. That underpins our expectation that Fed hikes will be more gradual in 2019, as the economy slows.

Daily Pivots: (S1) 1.3343; (P) 1.3394; (R1) 1.3433; More...

USD/CAD drops sharply in early US session as the pull back from 1.3444 accelerates, after failing to sustained above 1.3385 key resistance. But at this point, USD/CAD is held well above 1.3160 support. Thus, there is no indication of near term bearish reversal yet. Intraday bias is turned neutral first. On the upside, break of 1.3444 and sustained trading above 1.3385 will extend medium term up trend to 1.3685 fibonacci level. On the downside, though, break of 1.3160 support will indicate rejection by 1.3385 resistance and turn near term outlook bearish.

In the bigger picture, up trend from 1.2061 (2017 low) is still in progress and decisive break of 1.3385 will pave the way to 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685. In case correction from 1.3382 extend with another falling leg, downside should be contained by 50% retracement of 1.2061 to 1.3385 at 1.2723 to bring rebound.

Dollar spikes lower in early US session after non-farm payroll report showed lower than expected job and wage growth. That adds to argument that the momentum US job growth has peaked. Nevertheless, there is no follow through selling in the greenback seen. The only exception is USD/CAD with Canadian Dollar shot higher by stellar employment data. For today, Canadian Dollar is now the strongest one. It's followed by New Zealand Dollar and then US Dollar. Yen is the weakest one as risk sentiments stabilized. Sterling is hibernating as the second weakest.

Technically, USD/CAD fails to sustain above 1.3385 resistance and drops sharply. But break of 1.3160 support is still needed to indicate near term reversal. Otherwise, further rise remains in favor, at a later stage. EUR/USD, GBP/USD, USD/CHF, EUR/GBP and EUR/JPY are still bounded in familiar range. AUD/USD and EUR/AUD are still pressing 0.7199 support and 1.5781 resistance respectively.

In other markets, US futures are pointing to a flat open. Yesterday's later rebound might not carry forward to today. Major European indices are all in black, paring yesterday's losses. FTSE is up 2.00%, DAX is up 0.92%, CAC is up 1.74%. German 10 year yield is up 0.021 at 0.260. Italian 10 year yield is down -0.053 at 3.154.

Earlier in Asia, Nikkei closed up 0.82%. But other major indices were mixed. Hong Kong HSI lost -0.35%. Singapore Strait Times lost -0.14%. But China Shanghai SSE rose 0.03%. 10 year JGB yield also pared some loss and closed up 0.0104 at 0.062.

US NFP rose only 155k, missed expectation, wage growth also missed

US non-farm payroll report came in generally weaker than expected. NFP showed only 155k growth in November, well below expectation of 200k. Prior month's figure was also revised down from 250k to 237k. Unemployment rate, though, as unchanged at 3.7% and matched expectation. Meanwhile, average hourly earnings rose only 0.2% mom, missed expectation of 0.3% mom. The data adds to the argument that while US job growth is still strong, momentum has already peaked.

Canada employment rose 94.1k, unemployment rate dropped to lowest since 1976

Canada employment market surged strongly by 94.1k in November, well above expectation of 10.0k. Unemployment rate dropped to 5.6%, down from 5.8%. That's also the lowest level since 1976. Canadian Dollar surges sharply after the release. In particular, against Dollar which is pressured by NFP miss.

Italy may submit revised budget next Wed

After repeated rumors, Italy still haven't submitted the revised Draft Budget Plan to European Commission up till now. It's reported again today that the coalition government will have the budget ready by next Wednesday.

Another rumor comes up on Economy Minister Giovanni Tria's resignation, on budget row with the cabinet. It's reported that Five Star movement has requested Tria to step down, for ceding too much ground to EU. However, it seems that the League wants Tria to stay.

Five-Star leader, Italian Deputy Prime Minister Luigi Di Maio denied the rumor today and said "Tria is doing a great job and a winning team must not be changed".

Release in European session, Eurozone GDP growth was finalized at 0.2% qoq in Q3, unrevised. German industrial production dropped -0.5% mom in October versus expectation of 0.3% mom. Swiss foreign currency reserves dropped to CHF 749B in November.

BoJ Kuroda: No need for additional easing

BoJ Governor Haruhiko Kuroda told the parliament today that "the economy is sustaining its momentum for achieving our 2 percent target. But that momentum lacks strength, so we will carefully watch developments." For now, though, Kuroda added " I don't see the need to take additional monetary easing steps". And BoJ has no preset idea of what tools to use if more easing is needed, but policy makers will "carefully weigh the cost and benefit of any step we take."

Released from Japan, household spending dropped -0.3% yoy in October, much worse than expectation of 1.2% yoy rise. Labor cash earnings rose 1.5% yoy, higher than expectation of 1.0% yoy. Leading index dropped to 100.5 in October. The weak spending data highlights the fact that there is no condition for consumption to strengthen yet. It still take time for the rise in wages to pass though to consumption and then inflation.

Separately, according to a Reuters poll, 55% of Japanese companies expect 2019 growth to be around the same as 1% in 2018. 31% see it slowing and only 14% see it accelerating. Among the concerns of business, the planned sales tax hike in October and US-China trade war top. US-Japan trade negotiations, emerging markets and Middle East tensions are also seen as risks to growth.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.3343; (P) 1.3394; (R1) 1.3433; More...

USD/CAD drops sharply in early US session as the pull back from 1.3444 accelerates, after failing to sustained above 1.3385 key resistance. But at this point, USD/CAD is held well above 1.3160 support. Thus, there is no indication of near term bearish reversal yet. Intraday bias is turned neutral first. On the upside, break of 1.3444 and sustained trading above 1.3385 will extend medium term up trend to 1.3685 fibonacci level. On the downside, though, break of 1.3160 support will indicate rejection by 1.3385 resistance and turn near term outlook bearish..

In the bigger picture, up trend from 1.2061 (2017 low) is still in progress and decisive break of 1.3385 will pave the way to 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685. In case correction from 1.3382 extend with another falling leg, downside should be contained by 50% retracement of 1.2061 to 1.3385 at 1.2723 to bring rebound.

Economic Indicators Update

Canada employment market surged strongly by 94.1k in November, well above expectation of 10.0k. Unemployment rate dropped to 5.6%, down from 5.8%. That's also the lowest level since 1976.

Full release here.

Canadian Dollar surges sharply after the release. In particular, against Dollar which is pressured by NFP miss.

US non-farm payroll report came in generally weaker than expected. NFP showed only 155k growth in November, well below expectation of 200k. Prior month's figure was also revised down from 250k to 237k. Unemployment rate, though, as unchanged at 3.7% and matched expectation. Meanwhile, average hourly earnings rose only 0.2% mom, missed expectation of 0.3% mom. The data adds to the argument that while US job growth is still strong, momentum has already peaked.

Full release here.