Forex news for North American trading on December 2, 2016

  • The US stock end the day little changed
  • Trump forms strategic and policy group of CEOs
  • CFTC Commitments of Traders: Yen traders are finally square
  • EUR/USD: How to trade the Italian referendum - Credit Suisse
  • The top 5 releases and events for the week starting December 5
  • What time will the Italian referendum result be announced?
  • Italy isn't the only European country voting this weekend
  • This is the last stand for gold bulls
  • Renzi to offer resignation if referendum fails, minister says
  • Baker Hughes total rig count 597 vs 593 for the week ending December 2nd
  • S&P sees US growth in 2017 at 2.4% in 2017/2.3% in 2018
  • What is the price action in the EURUSD telling us this week?
  • What do the oddsmakers say about the Italian referendum
  • European stocks slumped this week, except Italy
  • New York Fed Nowcast Q4 GDP estimate rises to 2.7% from 2.4%
  • No sense of fear ahead of the Italian referendum
  • USD: The dollar's inflation speed limit - Nomura
  • Libya plans to raise oil output by 300k bpd 'in the near future'
  • November ISM New York 52.5 vs 49.2 prior
  • Why the market is focused on wage growth
  • Canada net change in employment 10.7k vs. -15K est.
  • November nonfarm payrolls +178K vs +180K expected
  • The strongest and weakest currencies as the NA traders enter for the day

In other markets:

  • S&P index +0.04%.. NASDAQ composite index +0.09%. Dow industrial average -0.11%
  • 10 year bond yield 2.394%, -5.4 basis points
  • Spot gold $1176, plus $4.18 or 0.36%
  • WTI crude futures $51.60, +$.54 or +1.06%
  • The strongest currency is the GBP. The weakest is the USD

The US employment report came out about as expected with regard to NFP estimates. The total change in jobs totaled 178K vs 180k estimate. The prior months were revised lower by a modest 2k. The unemployment rate move to 4.6% from 4.9% last month. This represents the lowest rate in 7 years. That is the good news. The bad news is that the participation rate fell to 62.7 from 62.8 and the average hourly earnings decreased by -0.1% versus +0.2% estimate and fell from 2.8% YoY to 2.5% this month.

The market seemed to be looking for something better so the dollar sold off. The greenback also declined for the trading week. The only currency the dollar rose against this week was the JPY (by 0.26%). The dollar lost the most ground against the British Pound (by 2.03%). The Canadian dollar rose by 1.72% as rising oil prices helped that currency. Against the EURUSD, the dollar lost 0.76%.

How are some of the currency pairs looking at the end of the trading week?

The EURUSD bottomed today against the 100 hour MA (at 1.0627 currently). That is bullish. What is not so bullish is the pair could not extend above the 38.2% of the move down from the November 10th high (day after the election day trading) at the 1.06835. The pair is closing the week just above the 100 bar MA on the 4-hour chart at 1.0665. The Italian referendum over the weekend has the chance to lead to a gap opening on Sunday. For a technical look at the EURUSD, click here.

The GBPUSD marched higher for most of the day. One of the main catalysts seems to have been the EURGBP which moved steadily to the downside. That pair has seen the price go from 0.8481 to 0.8370 yesterday. Then back up to 0.8482 today before heading back downt to 0.8370 at the week's close. The move lower in the NY afternoon session may have been influenced by volume limitations, but it may also have had some political concerns from weekend the Italian referendum. In any case the GBPUSD moved above the 1.2700 level, traded at the highest level since October 6th and will look toward the 100 day MA at 1.2802 in next week's trading. The GBPUSD price has not traded above the 100 day MA since Brexit day. PS shorts may be feeling some squeeze in this pair. For the EURGBP, it moves closer to the 50% of the move up from the May 25th low at 0.8354. Other swing lows from August and September at 0.8343 and 0.8332 will be targeted next week, as will the 100 day MA at the 0.82756 level.

Canada employment came out better than expectations at +10.7K vs -15K estimate but the bad in the report is the job gains were once again in part time jobs. Nevertheless, the USDCAD moved a touch lower on the day. The CAD was supported in the week by crude oil which rose about 10% in the current week.

The USDJPY traded tired both yesterday and again today BUT the low did find support at the 100 hour MA (currently at 113.38 - closing at 113.46). The high for the week peaked at 114.82 which was 4 pips short of a swing high in mid Feb at 114.86. That and the 114.44-54 remains upside resistance into the new trading week. Although the pair trades "tired" (it did move up from 101.17 on election day to 114.82 on Wednesday), and there is room to correct and still keep the bulls more in control, the 100 hour MA at the 113.38 and then the 200 hour MA at 112.89 currently, needs to be broken and stay broken. Right now, we are just wandering slowly lower as traders take some profit. An interesting development is the JPY speculative position from CFTC finally squared up after being LONG JPY (so short USDJPY) during a 1300 pip rally in the USDJPY. Hedgers in the futures have done well, but the speculators....not so well at all. OUCH!

Wishing you all a happy, healthy weekend. - G

Below is an end of day snapshot of the percentage changes of the major currencies vs each other.