EUR/USD: Ugly NFP triggers dollar's sell-off

Valeria Bednarik FXStreet

EUR/USD Current price: 1.1248

Live Chart for the EUR/USD

Big miss from US employment is sending the dollar down across the board, as the American economy added just 151K new jobs in August, well below the 180K forecast, while the unemployment rate held at 4.9% in the month, worse than the 4.8% expected. Wages rose by 0.1% monthly basis, below previous 0.3% and the expected 0.2%, while Average hourly earnings came in at 2.4% yearly basis, compared to previous 2.6%. July's job's creation was revised higher, from 255K to 275K, but there was not one single number to offer some hope to dollar's bulls in August.

The EUR/USD pair jumped to its highest in the week, so far printing 1.1251, still unable to confirm some follow through the 50% retracement of its latest decline, but looking increasingly bullish in the short term as in the 1 hour chart, the price is back above all of its moving averages. As long as 1.1200 contains retracements, the risk will remain towards the upside, with further advances beyond the 1.1240/60 region required to see the pair extending its rally up to 1.1300 and higher later today.

Support levels: 1.1200 1.1160 1.1120

Resistance levels: 1.1250 1.1290 1.1335

GBP/USD Current price: 1.3321

View Live Chart for the GBP/USD

The Sterling Pound accelerated its advance, trading at levels last seen in August 4th and above 1.3320, a major long term static resistance, as it’s the 23.6% retracement of the post-Brexit slump, and a tough bone to break ever since. The Pound has been quite strong ever since the week started, and seems likely it will extend its gains during the upcoming American session, as during the European morning, the UK released the final Markit Construction PMI for August that came in at 49.2, recovering from 45.9, the 7-year low printed in July, further supporting Pound's gains. Short term, the price is holding above the mentioned Fibonacci level, while indicators head north within positive territory, supporting an upward extension towards 1.3355, en route to the 1.3400 region.

Support levels: 1.3320 1.3270 1.3225

Resistance levels: 1.3355 1.3400 1.3440

USD/JPY Current price: 103.14

View Live Chart for the USD/JPY

Downside limited on risk appetite. The USD/JPY pair plunged to 102.79 after a much worse-than-expected US Nonfarm Payroll report, showing that the US economy managed to create just 151K new jobs in August, while the unemployment rate held at 4.9% against expectations of a decline down to 4.8%. The pair however, recovered quickly from the low, as stocks and commodities skyrocketed with the news, forcing investors out of safe-haven assets. The short term picture suggests that the upside will remain limited, as technical indicators have turned sharply lower and are ready to cross their mid-lines towards the downside. Nevertheless, the pair bounced from a bullish 100 SMA, meaning that a break below 102.70 is required to confirm a new leg lower, towards the 102.00/30 price zone.

Support levels: 103.10 102.70 102.30

Resistance levels: 103.60 104.00 104.40

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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