Back in the day, a collegue called today "Unenjoyment Day" instead of 'Unemployment Day'' Volatility is higher than normal. Risk is higher. There are a lot of pieces to the puzzle that could whip the market around.
The day is starting with stocks higher (Nasdaq up 85 and S&P up 20.55 points) and the yields higher as well with 2 2-year yield up 3.7 bps at 4.203%. The benchmark 10 year yield is up 1.5 basis point at 4.298% (the high this week reached 4.337%).
Add to the elevated risk is a presidential and congressional elections next week (Tuesday) and the FOMC rate decision (94% chance for 25 bp cut on Thursday). The BOE (Thursday) will also announce its rate decision and there are some that are thinking there are enough votes for no change (we will see).
The jobs number expectations:
- Consensus estimate +113K
- Estimate range +0K (ABN AMRO) to +200K (DBS Bank)
- September was +254K
- Private consensus +90K versus +223K prior
- Unemployment rate consensus estimate 4.1% versus 4.1% prior
- Prior unrounded unemployment rate 4.0510%
- Prior participation rate 62.7%
- Prior underemployment U6 7.7%
- Avg hourly earnings y/y exp +4.0% versus +4.0% prior
- Avg hourly earnings m/m exp +0.3% versus +0.4% prior
- Avg weekly hours exp 34.2 versus 34.2 prior
Numbers released so far this month:
- ADP report +233K versus +159K prior -- best in a year
- ISM services employment not yet released
- ISM manufacturing employment not yet released
- Challenger job cuts 55,597 versus 72,821 prior
- Philly employment -2.2 vs +10.7 prior
- Empire employment +4.7 vs +2.9 prior
- Initial jobless claims survey week 242K versus 259K prior
What about the technicals. Below are the levels in play and why.
EURUSD: For the 2nd day in a row, the price moved outside the "Red Box" with the 200 day MA area as the topside level, but the random high from yesterday stalled the rally near 1.0888 in the Asian session. The price wandered back lower as the clock ticked down and moved back below the 200 day MA and swing area near 1.08689 to 1.08725. Getting above that area is more bullish. Stay below is more bearish.
ON the topside the 1.09069 (50% of the range since April) and the 100 day MA at 1.0973 are the next targets.
On the downside, the 100 and 200-hour MA come in at 1.0835 and 1.08194, then 1.0810 followed by a swing area between 1.07609 to 1.07767. Those levels are fairly clogged together but are levels that when broken, add to the bearish bias. Break below 1.07609 and the door opens to the downside for the pair.
USDJPY: The 151.86 to 151.93 stalled the fall the last few days (give or take). The price is at 152.72 now. Get below that area and stay below will be my key for the short term. Much of the "stay below" will also be determined by if the price can get below the 200 day MA at 151.533. Below that the midpoint of the range since July at 150.757 and the 100-day MA at 150.41. Right now, the buyers are more in control above those key levels (and the 200 day, 50% and 100 day MA are all important in short, medium and long term bias). On the topside, the last three swing highs came inat 153.88 (give or take 1 or 2 pips). That level was the high twice this week, and going back to July 31 as well. Get above that ceiling and the door opens toward 154.54 to 154.878.
GBPUSD: The GBPUSD fell sharply yesterday after breaking below 1.2938 (see red numbered circles on the chart below). The run lower moved to a swing area target between 1.2844 to 1.28719. Yesterday, I said:
Today we are seeing follow-through selling that has taken the price now below last week's low at 1.29064, and is down testing part at the 50% midpoint of the move up from the April 2024 low to the September 2024 high. That midpoint level comes in at 1.2866. The pair is also within a swing area between 1.28449 and 1.28719. This area should hold support if risk-focused buyers enter.
The risk-focused buyers entered and will be a level to get below if the price moves below that level. A move below would look toward the 200 day MA at 1.28085. Move below it and the sellers can push lower.
On the topside, the 1.2938 remains a key level to get back above (red numbered circles). Above that and the market starts to focus on the 100 day MA at 1.2978 followed by the 100 bar MA on the 4-hour chart right at the 1.3000 natural resistance level. The high for the week moved 1.3042.
USDCAD: The high for the USDCAD in 2024 is at 1.39458. The high yesterday reached just below that level at 1.3944.The price is just below that level at 1.3929 currently. Move above and the high from 2022 comes in at 1.3977 and is the next target. Move above it and the price is trading at the highest level since May 2020. The door is open to the upside (if it can stay broken)..
On the downside:
- 100 hour MA at 1.39106
- 200 hour MA at 1.3877. The price has not been below that MA since October 2 (nearly a month). Key barometer today and going forward if the price can get and stay below that level. Swing area between 1.3831 to 1.38475 will be targeted.
USDCHF: The USDCHF over the last 12 days is in a range from 0.8632 to 0.8700 or 68 pips. That is not a lot.of price action. Traders are waiting for a break and run. The sellers had their shot late yesterday and early today but stalled at the 38.2% floor (of the move down from July 2024 high). The sellers could not push through and the price snapped higher (the CPI was lower today at 0.6% helping the CHF selling).
The 0.8700 remains to be broken with the high reaching 0..8685.There are a number of MAs between the extremes that will shift the short term bias.
