The US jobs report remains strong..kind of. The nonfarm payroll added 253,000 jobs but there were revisions to the prior month of -149K. Nevertheless the unemployment rate at 3.4% is still at record low levels. Gotta think that the baby boomers retiring just will keep unemployment rates lower until that point when AI starts to really kick in.
Wages remain a concern at +0.5%. Just anecdotally, high-paying tech jobs have been retracing. They over hired. However these were the highest paying jobs in the economy, and those people know that the technology is not going away. Those laid off workers probably still go to restaurants and on vacation while other lower paying job industries remain tight.
Meanwhile, US is trying to increase production of key industries in the US especially in the chip sector which is sucking a lot of resources toward it. Building multiple $20 billion chip plants and Arizona, and Ohio take a lot up concrete and steel and other stuff and resources.
Housing remains tight because there's not a lot of supply still. Regional banks who lend to small businesses and make loans for strip malls can be under pressure while other banks are okay. How do you control the exodus of depositors that lead to failures?
It ain't easy out there. Where is the tipping point for employment? Inflation is not likely coming down, but can it just go sideways to up, and not up 4%-5%? Can there be productivity gains from AI? That is the hope in an economy that is struggling with less workers? Is that it?
The USD moved higher after the jobs report. US rates moved even higher than their pre release levels. The 2 year yield is up to 3.882% up 15.6 basis points. Having said that the high for the week was at 4.16% on Monday. The low was around 3.65%. The 10 year yield is at 3.455% up 10.4 basis points. It's high for the week was at 3.608%. It's a low was at 3.298%. Yields are in the middle of the rate trading ranges this week.
Looking at the EURUSD , it moved from the near converts 100 and 200 hour moving averages at 1.10189 and fell to the next key target area near the 50% midpoint at 1.0963. Swing lows from last week and earlier this week created a floor near 1.09618 and 1.09653 - right around that 50% level. Admittedly on Tuesday, the price move below that floor but ultimately failed leading to the rise toward the high price from last week before sellers came back in on Thursday.
All of that converts the 100 and 200 hour moving average before the jobs report. Now after it, the price has moved lower but remains above the 50% midpoint.
What now?
While the 50% and swing area remains a key area to get below if the sellers are to take more control. If they can get below that level the 61.8% retracement and swing area near that level between 1.09320 and 1.09378 become the focus and targets.
Conversely a move back above the 1.1000 to 1.1006 and then the 100 200 hour moving average of 1.10189 become the upside targets.
Of course the price trades between those levels near 1.0978.
The sellers are more control below the moving averages but you can also argue that the buyers against the 50% retracement area are not wrong either.
