The dollar advances against all 16 of its major peers today as the non-farm payrolls indicate a 204K job increase in October, according to the labor market. The talks of a Federal Reserve data due to recent strength in manufacturing and a positive GDP figure that teeters on the three percent mark.
“Markets will be starting to talk about December tapering again,” said Vassili Serebriakov, FX strategist at BNP Paribas-NY.
The Australian and New Zealand dollars are on their way to 100 pip losses against the greenback. The AUD is falling through the 38.2 percent Fib. retracement to the yearly low. The large, red 4H candle is not encouraging as it heads to the closest support at .9300, over 50 pips away. ADX is weak, but it is gradually sloping up. Follow through on this move will signal future decline in sentiment. Resistance is now located at .9388 intraday.
The kiwi is following the Aussie dollar lower as it sits on price action support. The kiwi has a bit more to fall with RSI not in oversold territory yet, and the ADX is showing a strong trend at 22, and -DMI is spiking aggressively. Intraday target for kiwi is .8190 given a break on current support. A pullback is likely to .8245-50. A negative 20/50 EMA cross is also in the process which could facilitate the kiwi lower.
The Sterling is posting five-day lows and the most dramatic reaction to the US data, down over 100 pips. There is a 20/50 EMA bearish crossover forming on the 4H chart as it heads lower to support a 1.5910, although some buying may be present at 1.5955. The ADX shows a strong trend of 22 with a large +/-DMI gap.
The euro dollar is currently seeing some buying in a demand zone spanning 1.3290 to 1.3325. This zone represents the pullback created after the European Central Bank (ECB) announced a 25 bps rate cut. However, sentiment in the eurozone is negative and should continue to put pressure on EURUSD. A pullback to 1.3355 is possible given intraday price action, but look for price to hover in the mid-to-low 1.33 level given the strong dollar.
The Canadian dollar posts lower on the greenback as the US data overshadowed positive employment data out of Canada. The USDCAD is looking to breakout of its range and above the descending trend line. The pair should continue to attack 1.05. A close above this key level could sen the pair to 1.0550, while a failure to follow through could send the pair back below the downward trend line.
The USDCHF is considered a dollar proxy, and it shot up after the positive US data as the dollar index did. The pair has been supported by the 20 EMA, while the pair continues to attack the .9250 level which is currently acting as resistance. USDCHF could seek out some more pips give that price action resistance is near .9270, but given the massive jump a pullback could be due. Look for opportunities near .9180-90.