Markets were fairly quiet today during the European session, although it was felt that safe havens were still under pressure, as for most of the week. Sentiment improved this week due to softer tones from China and the US, resulting in gold and JPYs declining, while risk instruments such as commodity dollars turned quite bullish. Today, we heard some comments from Kudlow saying the U.S. and China will start trade talks in October, which have further improved sentiment and launched more risky assets for another bullish race.
But the most important events today were the publication of U.S. and Canadian employment reports. The unemployment rate but new jobs jumped much higher than expected, resulting in an increase in CAD. In the United States, and 3.7%, while the participation rate increased by 2 points. This is a positive thing, as unemployment would have lost 2 points if the participation rate had remained unchanged. Earnings also exceeded expectations, but traders tended to focus on new jobs that fell short of expectations. an increase of $ 130,000 was recorded last month, but this did not satisfy USD traders, and a slight increase in private payroll was enough to bring the USD down even further.
The European session
- German industrial production – yesterday in Germany we saw a big drop in factory orders for August as the figure was -2.7%. Today, industrial production is expected to grow by 0.4%, but turned negative and instead declined by 0.6%. This is the third downturn in the last four months, so it is improving instead of getting worse in Germany.
- Italian Retail – The retail report released last month showed a nice jump of 1.9% in June, which was impressive after three negative months. Today’s report is expected to show a 0.4% increase in sales in July, but turned more negative, showing a 0.5% decline for the month.
- Final GDP in the Eurozone – The initial GDP for the second quarter was 0.2% and is expected to remain unchanged at today’s final reading. QoQ remained unchanged at 0.2%, but YoY GDP changed from 1.1% to 1.2%. The last reading on the change in employment was also unchanged at 0.2% in the second quarter.
- Boris Johnson is confident he will get the deal – UK Prime Minister Boris Johnson said earlier today that he was going to Brussels to make an agreement. In the UK, people want us to go further and leave on 31 October. He hopes to conclude a Brexit agreement at the October EU Council summit. The worker must have the courage to make the election and refuse to consider resigning.
The American session
- U.S. Employment Report – The unemployment rate did not change as expected, at 3.7%, although the participation rate rose to 63.2% from the previous 63.0%, a positive sign. The unemployment rate would have fallen by 2 points if the participation rate had not increased. But non-farm payroll in August was lower than expected, up from 130,000, compared to the expected 160,000.
- U.S. Income Report – Earnings are expected to grow 0.3% in August. But earnings came in better than expected, up 0.4% last month from 0.3% as expected. Average hourly earnings in YoY also improved, growing 3.2% year-over-year, compared to the expected 3.0%. The previous hourly average earnings YoY changed to a higher 3.3% from the previous 3.2%.
- Canadian Income Report – The unemployment rate remained unchanged at 5.7%, as expected in Canada. The change in employment was much better than expected, showing an increase of 81.1 thousand in August, compared to the expected 18.9 thousand. This surge in new jobs comes after two negative months, which came as a surprise to the market. Hourly wages were 3.8%, compared to an estimated 4.5%. The previous month was 4.5%.
- He is looking for vision
- The main trend remains bullish on the H1 chart
- Bottom retraction is complete
- 50 SMA provides support
The decrease stopped at 50 SMA
The USD / JPY has been declining for some time, with larger time frames. But this week, the couple became bulls as the mood improved. The USD was weak, but the JPY was even weaker. Although we saw lower feedback earlier today after the U.S. Employment Report, this decline stopped at 50 SMA (yellow). Now this pair is almost over and the price is starting to jump out of 50 SMA so we are bullish on this pair. We went on USD /he USD has fallen again after the U.S. Employment Report, which has relied heavily on the positive side, especially earnings. But the fo JPY not long ago.
So tcus was on slightly weaker-than-expected payroll accounting, especially private wages, which means the USD closes the weak on a bearish basis.