Main market movers on Friday were the employment numbers. In the USA, the NFP report was, as always, highly anticipated and once again created massive volatility in currencies. According to the newest figures, the economy improved by 236K new jobs in February, exceeding the forecast of 165K. The Unemployment Rate declined to 7.7% from 7.9%, although this data is far from reliable. The only blemish was a downward revision of January numbers to 119 K. Who is to say the same will not happen next month to today’s data?
In addition, markets had to absorb employment report from Canada. It does not get as much attention as the NFP and many traders simply overlook it. Shame, really, because the Canadian Dollar often responds in force and Friday was such an occasion. Employment in Canada increased by 50.7K, easily beating the expectation of 8.0K. This result was a significant improvement over January, when the number was negative 21.9K. At the same time, the Unemployment Rate stayed at 7.0%, better than the forecast of 7.1%. In response, the Loonie surged versus the other majors, although it was unable to maintain these gains into closing. Nonetheless, it was a good day for the CAD, while the other commodity currencies lost ground.
As mentioned in the last post, the Yen pairs started Friday with nice consolidation patterns. After a very active Thursday, these instruments were likely to remain volatile. The next move was a continuation of the earlier trend, meaning higher across the board. For the EUR-JPY that proved to be enough for a gain of 60 pips. More importantly, the objective was met before the NFP report, which caused additional price swings. I simply watched what happened at that point, skipping the action.
Another trade of note took place in the GBP-USD. Here I simply waited for the London open time, and traddled the preceding range. It was not very wide, suggesting a trade with a small objective, only 30 pips. While not very impressive in size, this transaction was smooth, working out as intended. Have a great weekend!
Mike K.