It was a great day for the US economy today as the economic gods smiled on results out for the US. Firstly ADP non-farm payroll data came in much stronger than expected at 237K; a much better result than anyone expected. While in addition to this strong result we saw ISM manufacturing PMI lift to 53.5, something that many had not been expecting, including myself. After all of this positive data you would expect to see a lift for the USD and we saw it sharply in the commodity currencies again, and in addition to this the S&P 500 looked to claw back some ground as it lifted to 2076, before holding up at resistance at 2071.
Metals have been moving lower at the moment, as the market continues to bet on a positive result out of Greece still. Silver is looking very interesting at the moment as it slides lower on the charts towards strong support at 15.442. Tomorrows data may yield some strong moves as non-farm payroll data is due out and a strong result could see support at 15.442 tested strongly, and a possible move down to 15.185 before the pressure eases. Either way I will be watching the metals markets quite closely, as non-farm generally leads to some nice plays of strong levels, as the market, although making fundamental moves in nature, still has to play off technical levels.
The USDJPY finally rallied of strong support at 122.394. In previous articles I had talked up this level and it pay dividends today for traders as the Yen finally weakened. In part, this was lead by weak Chinese data and worries over the economic health of China. From here on out we have some strong plays likely for the USDJPY, with the next level of resistance set for 123.618. Monetary base data is also due out shortly, but this is unlikely to provide any strong moves for the USDJPY as forecasts are generally on target for monetary base expansion.
The New Zealand dollar continues to take more heat, as dairy auction figures showed a further drop of 5.9%. This was the ninth decline in a row, and the New Zealand economy which has a 60% exposure to dairy exports, was hit hard. Many analysts are now predicting the Reserve Bank of New Zealand will be forced to act further and cut interest rates to help shore up the New Zealand economy. So the bottom is now looking closer, but we are just not there yet when it comes to the bearish trend in the market, and support is looking likely at 0.6678 - it's certainly possible we may see some unwinding at support and a jump in the NZDUSD.
Finally the USDCAD continues to impress on the market, as weak Canadian GDP data (-0.1% m/m) and a further surplus in the oil markets have lead to strong selling of the loony. With the breakthrough of previous resistance at 1.2380 the sky has so far been the limit for the USDCAD and certainly the next level of resistance at 1.2784 is likely to be where the market is aiming. There is also rumours that the Central bank of Canada is under pressure to act on further measures in order to help the Canadian economy. However, with US data showing a pick-up in the economy, it's likely there will be some caution for any further monetary policy.
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