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The US Unemployment Falls to Almost 3-Year Low Record

A guest post written by DAR Wong

Currency Market Observations – 6 Feb 2012

Fundamental Outlook

The US unemployment dropped to 8.3 percent in January with increased jobs. Manufacturing in US and UK steadied in January data and pulled up global stock prices in optimism. However, consumer confidence remains weak in American markets and Eurozone also stays murky on Greek bailout with creditors refusing to swap debt agreement.

The US consumer spending rose 0.1 percent in December with little changes in tight household budgets. Consumer confidence measured by New York-based Conference Board slid to 61.1 in January, adding pressure to weak demands.

The Institute for Supply Management-Chicago Inc. reported its business index dropped to 60.2 in January from prior month 62.2 while the factory climbed to 54.1 from 53.1 in December. Another separate report showed US construction spending increased at the fastest pace over 4 months in December by 1.5 percent.

The weekly jobless claims filed by American citizens fell 12,000 to 367,000 as of 28 January, indicating more job employments have been provided. The US unemployment dropped to 8.3 percent in January, making the lowest record since February 2009 while 243,000 jobs were added that exceeded the most optimistic forecast.

German adjusted jobless rate slipped to 6.7 percent in January from 6.8 percent in December, bolstering growth in the largest economy in Eurozone with little changes. Another index on consumer sentiment in the 17- nation Eurozone rose to 93.4 from a revised 92.8 in December, struggling to emerge from debt crisis.

The European Central Bank (ECB) fails to reach an agreement with creditors of Greek national debts in a debt swap. Many analysts are predicting Greece will leave the Euro due to the challenge of EUR14.5 billion bond payments that will mature on 20 March.

The UK manufacturing index compiled by Markit Economics and Chartered Institute of Purchasing and Supply rose to 52.1 from a revised 49.7 in December, indicating unexpected growth in January. The services index reported by the same institutions jumped to 56 in January from prior month 54 as new orders increased and business confidence improved.

Technical Forecast

USD/JPY came down to nearly 76.00 benchmarks and rebound to 76.44 closing for weekend. This week, we reckon the trend will consolidate and firm up to 77.00 levels for technical digestions. Otherwise, breaking beneath 76.00 regions may test 75.50 levels as next target.

EUR/USD is consolidating sideways from 1.3030 to 1.3230 while waiting for breakout trend to follow this week. We believe the fundamental outcome of resolving Greek crisis will decide the direction in coming week though we favor southern train from technical outlook. Breaking the aforementioned support will test lower grounds at 1.2900 regions while uptrend that penetrates above 1.3230 will possibly reach 1.3400 regions.

GBP/USD settled at 1.5798 for weekend that was very neural on EMA200 line. This week, the market may test the 1.5850 resistance again before sliding. Closing below 1.5800 will indicate the new bearish trend while it may aim at 1.5650 regions. Abandon your short-view if the market violates and settles above 1.5880 levels.

Dar Wong

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

Wong is the founder and Principal Consultant of and holds a professional
qualification in NASD series 3 and 5 approved by National Futures Association (USA).


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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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1 Comment to The US Unemployment Falls to Almost 3-Year Low Record

  • Mia's Gravatar Mia
    February 15, 2012 at 9:18 AM | Permalink

    Thank you so much for the post, it was interesting reading.