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American Payroll Slides Unexpectedly amid Holidays

A guest post written by DAR Wong

Currency Market Observations – 06 April 2015

Fundamental Outlook

The US payroll surprises in decline and far below prior month. Japan reveals stagnation in growth among large manufacturers amid more stimuli from central bank. Euro zone posies in steadiness from inflation outlook while UK shows contradiction in housing demand cum supply.

The US pending homes sales rose 3.1 percent in February and gained for a second straight month after advanced 1.2 percent previously. Personal spending improved 0.1 percent after it was contracted to minus 0.2 percent in January.

The US Conference Board of consumer confidence was reported at 101.3 in March and better than revised 98.8 in prior month. Weekly claims for state unemployment benefits dropped 20,000 to a seasonally adjusted 268,000 for the week ended March 28, lower than prior week data at 288,000.

American trade deficit in February narrowed 16.9 percent to USD35.4 billion, the smallest since October 2009. Despite the improving figures, payroll shocked the market with unexpected decline on Friday while market was closed for long weekend.

American non-farm payroll for March created only 126,000 jobs and far below the expectation, after it charted 264,000 in February. Unemployment stagnated unchanged at 5.5 percent. Market traders expect to see falling stocks on Monday when market re-opens after holiday.

Prelim industrial production in Japan surprised market by contracting at minus 3.4 percent after it gained 3.7 percent in January. In the quarterly Tankan report, sentiment among Japan’s big manufacturers held steady in Q1 at 12 and unchanged from previous quarter. However, this data is below forecast and market analysts expect it to worsen in the current Q2.

Eurostat reports the consumer inflation estimate in Euro zone improves at minus 0.1 percent in March from a year ago compared to minus 0.3 percent in February. Unemployment rate among the 19 countries stayed at 11.3 percent in February.

Bank of England (BOE) says the mortgage approvals in February rose to 62,000 and remained advancement for a straight 5 months. Markit reports the UK construction index fell to 7.8 in March after recorded 6.1 in prior month, underscoring a slowdown in recovery in housing demand.

Technical Forecast

USD/JPY made decline on Friday as Dollar slowed in demand, This week, the trend will hover at 119.00 but may be heading down to 118.00 supports if Dollar weakens further. The resistance is spotted at 120.30 regions in case of rising retracement. Sideways trend is expected for near future until we hear from Bank of Japan.

EUR/USD has been supported at 1.0700 areas illustrated last week and closed at 1.0960 regions. This week, we reckon the market may continue to climb higher for corrective sentiment while aiming at 1.1200 targets. Immediate support lies at 1.0800 and should not be violated in order to maintain the uptrend.

GBP/USD has been trading sideways with a small spike on Friday closing at 1.4902 levels. This week, the trend may rise higher while sitting at 1.4770 supports. We predict the bulls need to challenge immediate resistances at 1.5000 regions before moving up to 1.5200 levels in-lieu of corrective Dollar.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

DAR Wong is an approved fund manager in Singapore with 25 years of global trading experiences. You may reach him at dar@pwforex.com

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

 






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