The US market was a strange creature today as the unexpected led to..well more of the unexpected. Despite the poor result out from non-farm payroll today as it came in at 223K (exp 232K). Unemployment claims came in poorly as well at 281K, leading to the market getting nervous over the proposed pick up the FED has been promising over the last month. However, some good news came about as the unemployment rate dropped to 5.3% from 5.4%. So with all the negative news from the labour markets you would expect a steep sell off in the USD. What we saw was a market relatively flat and not hungry when it came to labour information; it still seems that the market is focused solely on Europe and the concerns there.
Oil (WTI) was a major mover as it suffered on yesterdays 2.39M barrel surplus and the USD remaining quite strong. Previously we had a strong pennant pattern forming in the market, and for the most part, many traders expected that we would see consolidation around the $60.00 mark. However, the sharp drop and push down to support at 56.52 shows that the market is still looking for large swings and movements. So with oil teetering on the edge, a push through 56 into the high 55's could bring the sellers back into the market who are worried about global demand falling further - especially with Greece applying global pressure.
Metals were also a sharp mover today, as silver rebounded of the support level I talked about this morning at 15.453. Silver bulls have finally seen some rays of hope after a week of drops in the market. For the most part commodities really have had a struggle, but the end of this week has finally given some reprieve, and could lead to unwinding of some positions in the market. Targeting resistance levels, I would certainly pay close attention to 15.812 as a possible catalyst for market movements in the closing of the session.
The Australian economy continued to feel further pressure as trade balance data came in quite weak at -2.75b. Despite all of this negative data the AUDUSD managed to find some strong support at 0.7585 and looks likely to hold its ground in the short term. What I will be watching for is the retail sales data due out today with the market expecting 0.5%. This seems slightly ambitious given the recent problems with the domestic market in Australia, and it would not be surprised to see the market expect some sort of negative result overall.
Finally the Kiwi dollar which everyone loves to trade has finally found solid support as it swung down to 0.6672. For many this was a line in the sand and a big support level so we could see some strong unwinding in the NZDUSD cross in the final closing stages of today. The question will be is Australian retail sales data capable of dragging the kiwi back down, or will the NZDUSD hold up, and is it possible that we could even see a drop on the AUDNZD which has been trending strongly for some time.
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