London Forex Report: Blowout NFP Number Sees USD Soar

Near doubling in US nonfarm job creation to its highest level this year at 271K coupled with improvement in jobless rate to 5.0% and the 0.4% MOM surge in wage growth lowered the hurdle for a December Fed rate hike and could be a game changer. This will make the next payroll data even more important, the last before the Fed convenes for the last time this year. On the contrary to positive US data, China trade figures disappointed again, with exports falling more than expected by 6.9% YOY in October and as imports extended its decline, adding to signs the Chinese economy is facing double whammy from slowing domestic and external conditions that would still necessitate further policy easing. USD surged against all G10s while the Dollar Index soared to its highest level in six months at 99.16.

EURUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Fundamental: The surprisingly robust Nonfarm Payrolls data, boosted the USD, which rose sharply against other major currencies on Friday. The USD index hit 99.34, its highest since mid-April. As a result, EUR suffered its worst decline since the last ECB meeting. EURUSD traded 1.0708, a six-month low

Technical: While 1.0830/50 caps intraday upside corrections, bears target a break of Friday’s lows en route to a test 1.0560 next ahead of an assault on year to date lows. Only a close above 1.09 eases immediate downside pressure.

Interbank Flows: Bids 1.07 stops below. Offers 1.0830 Stops above.
Retail Sentiment: Bullish
Trading Take-away: Sell against 1.0830/50 resistance targeting 1.0560

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GBPUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Fundamental: GBP suffered a double whammy after BoE’s bearish view and surprising Nonfarm Payrolls data. GBP dropped below 1.5100 and it is now trading at around 1.5050 Markets expect the dollar strengthening is going to continue and Cable to test the psychological 1.5000 handle in coming sessions.

Technical:  While 1.5150 contains upside reactions expect a test of of bids at 1.50 as the next bearish objective. Only a close above 1.52 eases immediate bearish bias

Interbank Flows: Bids 1.50 stops below. Offers 1.52 stops above
Retail Sentiment: Bullish
Trading Take-away: Sell against 1.51 resistance targeting a 1.50 test

gu2015-11-09 07_40_57-NetDania - NetStation

USDJPY
Outlook: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks): Bearish

Fundamental: USDJPY trades bid rising to 123.26 against the Yen, its highest since 21 August. The USD increased 2.1% last week against the JPY while this is also its largest weekly gain against USDJPY since last December.

Technical: Upside objective of the primary equality objective at 123.50 essentially achieved, while 122.50 supports downside reactions, market structure remains bullish to test 2015 highs next

Interbank Flows: Bids 122.50 stops below. Offers 124 stops above
Retail Sentiment: Bearish
Trading Take-away: Closing longs from 120.50, sidelines for now

uj2015-11-09 07_41_30-NetDania - NetStation

EURJPY
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Fundamental: The Nikkei has continued to trade with a bid tone since last week coupled with the sales in JPY. The pair caught a bid Friday as USDJPY breaks out to the topside with US yields supporting further JPY sales.

Technical:  Bears now target equality corrective objective at 131.20, only a close above 133.50 eases immediate bearish pressure.

Interbank Flows: Bids 131.00 stops below. Offers 133.50 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

ey2015-11-09 07_42_03-NetDania - NetStation

AUDUSD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bearish

Fundamental: Due to the better-than expected US Nonfarm Payrolls data, Aussie dropped to 0.7020, its lowest since 2 October. The gold price fell to a three-month low on Friday and was set to post its biggest weekly drop in more than two years.

Technical: While .7100 caps corrective upside reactions expect a retest and breach of Friday’s lows as bearish momentum builds for a retest of year to date lows.

Interbank Flows: Bids .7000 stops below. Offers .7100 stops above
Retail Sentiment: Bullish
Trading Take-away: Squared shorts into .7030 target, sidelines for now

au2015-11-09 08_26_53-NetDania - NetStation

USDCAD
Outlook: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks): Bullish

Fundamental: Canada added 44K jobs in October, lowering the unemployment rate to 7% which beat the market forecasts 7.1%. However, CAD was still heavily pressured by robust US Nonfarm Payrolls data. USDCAD surged to around 1.330 after the non-farm data released. Oil price slid as much as 2% on Friday, on pressure from rallying USD and higher interest rate expectations.

Technical: Offers just above 1.33 stall the upside ratchet, bulls have the bal while 1.3260 supports intraday downside. However a close below 1.3260 today would suggest a false upside break and a bull trap sustained weakness below 1.3220 confirms.

Interbank Flows: Bids 1.3250 stops below. Offers 1.3350 stops above
Retail Sentiment: Bearish
Trading Take-away: Sidelines for now

uc2015-11-09 08_27_22-NetDania - NetStation

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