US Dollar: Nonfarm payroll on Friday saw a mixed reaction and eventually a weaker Dollar. Unemployment held steady at 5.3% but jobs created fell marginally short at 215k vs 222k expected. Whilst these numbers aren't at all bad the markets wanted something stronger to signal (and cement home) a September rate hike. The labour markets condition index will warrant closer attention leading up to September's FOMC rate decision. Price wise the USD Index (DXY) is making hard work of extra gains and lacks bullish conviction. This makes it vulnerable to a retracement, especially judging from Friday's reaction from NFP.
Australian Dollar: For now it seems the Australian Dollar is vulnerable to further upside as the expectation of a rate cut this year has all but evaporated. RBA's Philip Lowe speech and consumer inflation expectations could back this up so worthy of paying closer attention. Chinese data has been weak of late so if there is an improvement this week the Aussie should be further supported. Looking at data from CFTC the net weekly net positioning for large speculators has produced a bullish divergence and last week saw bearish bets had subdued (leaving the indicator relatively unchanged. Price has since bounced from these lows.
British Pound: GBP crosses have suffered losses as 'Super Thursday' turned out to be a drab affair and a dovish BoE. This is not the first time they have made noises about raising interest rates sooner than later, before doing a U-turn to send signals of cold feet. Therefore I feel GBP crosses do face deeper retracements near-term as the repositioning (mainly bullish bets being closed) plays out, with GBPAUD and GBPNZD particularly vulnerable to downside as the two commodity currencies do appear oversold.
Canadian Dollar: Large speculators continue to increase their short exposure, with the net positioning indicator at its lowest since March '14. There still appears to be little reason to buy Canadian Dollars at present so suspect we could see further downside in the week/s ahead but the price of oil can help provide real-time clues, as further weakness here should spill over into a weaker CAD. With a relatively quiet calendar week for CAD crosses then Brent, WTI oversees currency strength can be our guide.
Euro: EURUSD failed to retest the 1.0810 swing low, instead producing a higher swing low to suggest near-term strength is on the card. This suggestion is given an extra boost as it was produced post-NFP. The Eurozone produces a bulk of the data this week so we have plenty of data to get Euro crosses moving. Large speculators have marginally increased their short holdings but not enough to be confident of significant further downside (compared to say, CAD futures). With EURUSD the line in the sand is 1.080 to confirm bearish resumption but, until then, I will assume there are corrective upside risks.
New Zealand Dollar: Even the New Zealand Dollar managed to bounce higher in the last two sessions against the Greenback (which is another clue for a USD retracement). A break below 0.6484 is required to confirm bearish resumption but, until then, we risk trading within the 0.650 - 0.672 range as part of a sideways correction.
Weekly Wrap: Greenback mixed following Non-farm Payroll
Whilst employment data was pretty good on Friday it was not enough to convince traders the September rate hike was set in concrete. Looking ahead I suspect USD pairs could be on the back foot as we enter this week.