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​The Trump administration has not yet formally deployed the long-awaited latest $200 billion in tariffs against China, but a new Wall Street Journal report indicates that Japan might be next on the agenda.
Article / 01 February 2013 at 14:51 GMT

US January Employment Report: Average

Blogger / MoreLiver's Daily
Finland

US non-farm payrolls increased in January by 157,000, versus the consensus expectation of 166,000. The US unemployment rate nudged up to 7.9 percent versus an expectation of 7.8 percent. The markets were apparently talking of a bigger number, and the last-minute expectations were probably around 185,000 with a 7.7 percent  to 7.8 percent unemployment rate. However, the report was ‘saved’ by upward revisions – December's payroll count was changed from  plus 155,000 to plus 196,000. Thus, today’s report contained no big surprises.

The uptick in the unemployment rate was the first since September, and as it is the Fed’s threshold variable for conducting monetary policy, the immediate reaction was that the end of quantitative easing is not in sight for now. It feels like people are thinking that perhaps these numbers will be revised later as well, and the payroll number is still in line with recent job growth.

Market interpretation
All in all, this does not change  US policy right now - and certainly not the Japanese or  European policies. That leaves the drivers behind the EURUSD and USJPY bulls in place, and any setbacks should currently be seen as technical corrections. I stick with what I wrote earlier today that there is room for correction. Currently it seems that my scenario is validated. EURUSD 1.3670-resistance held for now, USDJPY initially fell below the morning's range 92.05-92.25, returned back up, before continuing lower.

If you look at the daily charts, during trending times we've already had the "average" upmove for the day, and any more upside is thus unlikely today. I see a 1.3585-1.3650 range for the rest of today’s session. Longer-term, during trending times it is rare for the market to move more than five to seven sessions in one direction without a consolidation. Perhaps now is the time? Previous consolidations have been around 150 pips wide, and have lasted for five to seven sessions, suggesting a 1.3500-1.3670-range for the next week. And this would still leave the uptrend intact…

See also John J Hardy’s and Steen Jakobsen’s comments. The full employment report can be viewed on BLS, prewritten articles from Reuters and Bloomberg.

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