Macroeconomic overview
Nonfarm payrolls increased by 227k jobs in January, the largest gain in four months, the Labor Department said on Friday. The unemployment rate, however, rose one-tenth of a percentage point to 4.8% and wages increased by only three cents, suggesting that there was still some slack in the labor market.
Still, the labor market is tightening and could hopefully soon spur faster wage growth. Federal Reserve officials view the jobs market as being at or near full employment.
The market had forecast payrolls rising 175k last month and the unemployment rate unchanged at 4.7%. January figure was higher than expected, but the economy created 39k fewer jobs in November and December than previously reported.
The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, was at 62.9% in January, the highest level since September. The employment-to-population ratio was at 59.9% last month, the highest level since March 2016.
A broad measure of unemployment that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment rose two-tenths of a percentage point to 9.4% last month.
Average hourly earnings edged up 0.1% last month, below expectations for a 0.3% rise. December's wage gain was revised down to 0.2% from the previously reported 0.4% increase.
There was a big decline in earnings in the financial sector last month, which probably offset minimum wage increases that took effect in 19 states in January. The small gain lowered the year-on-year increase in earnings to 2.5% from 2.8% in December.
On Wednesday, the Fed kept its benchmark overnight interest rate unchanged in a range of 0.50% to 0.75%. It said it expected labor market conditions would strengthen "somewhat further."
Technical analysis
The EUR/USD rise has lost its momentum. The rejection of a downward move on Friday and the fact that the EUR/USD is still above the 7-day exponential moving average suggest that the market is not ready yet for a corrective move, but there is also not enough fuel to break above recent high. As technical analysis suggestions are unclear, the market will focus on other events. Some speeches of Fed policymakers are scheduled for this week (Harker for today, Bullard and Evans for Thursday). Their rhetoric may set the market direction.
Trading strategy
We wrote on Friday that our short-term long position was under threat but after U.S. non-farm payrolls the situation looks more optimistic. We hope that less hawkish comments from U.S. central bankers will support near-term EUR/USD gains. The long-term outlook remains bullish.
GrowthAces.com - Daily Forex Trading Strategies
Nonfarm payrolls increased by 227k jobs in January, the largest gain in four months, the Labor Department said on Friday. The unemployment rate, however, rose one-tenth of a percentage point to 4.8% and wages increased by only three cents, suggesting that there was still some slack in the labor market.
Still, the labor market is tightening and could hopefully soon spur faster wage growth. Federal Reserve officials view the jobs market as being at or near full employment.
The market had forecast payrolls rising 175k last month and the unemployment rate unchanged at 4.7%. January figure was higher than expected, but the economy created 39k fewer jobs in November and December than previously reported.
The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, was at 62.9% in January, the highest level since September. The employment-to-population ratio was at 59.9% last month, the highest level since March 2016.
A broad measure of unemployment that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment rose two-tenths of a percentage point to 9.4% last month.
Average hourly earnings edged up 0.1% last month, below expectations for a 0.3% rise. December's wage gain was revised down to 0.2% from the previously reported 0.4% increase.
There was a big decline in earnings in the financial sector last month, which probably offset minimum wage increases that took effect in 19 states in January. The small gain lowered the year-on-year increase in earnings to 2.5% from 2.8% in December.
On Wednesday, the Fed kept its benchmark overnight interest rate unchanged in a range of 0.50% to 0.75%. It said it expected labor market conditions would strengthen "somewhat further."
Technical analysis
The EUR/USD rise has lost its momentum. The rejection of a downward move on Friday and the fact that the EUR/USD is still above the 7-day exponential moving average suggest that the market is not ready yet for a corrective move, but there is also not enough fuel to break above recent high. As technical analysis suggestions are unclear, the market will focus on other events. Some speeches of Fed policymakers are scheduled for this week (Harker for today, Bullard and Evans for Thursday). Their rhetoric may set the market direction.
Trading strategy
We wrote on Friday that our short-term long position was under threat but after U.S. non-farm payrolls the situation looks more optimistic. We hope that less hawkish comments from U.S. central bankers will support near-term EUR/USD gains. The long-term outlook remains bullish.
GrowthAces.com - Daily Forex Trading Strategies