From Citi: "While the unemployment rate may rebound slightly in the coming month, other data suggest the fundamental trend in unemployment is gradually down."
Gold holds at $1369.20/oz, up from an earlier low of $1353.30 and a high of $1378.74. The market watches to see if gold can break back above the 55-day moving average at $1378.35, decisively broken Thursday.
Airline stocks are having another strong session. Their collective 0.8% gain flies in the face of the broader market's move lower. Alaska Air (ALK 62.70, +3.00) is currently one of the strongest performers in the airline space. Its 5% surge has taken the stock to levels not seen since 1998. As a group, airline stocks are already up 4.5% this year. That comes on top of the near 40% annual gain scored by the Amex Airline Index in 2010.
EUR/USD edges higher as market players pare back shorts heading into the weekend. The pair will need to close back over $1.2965/70, the lows seen Dec (old support/now resistance) for any kind of upward momentum to be seen, traders say. In the bigger picture, the euro will need to again vault its 200-day moving average, in place at $1.3076 Friday. For now, traders are content to sell any larger euro rallies. The euro has fallen 3.9% from peak to trough ($1.3433 Jan 4 to Fri lows) in 2011 so far.
The dollar fluctuated against major counterparts as the U.S. payrolls report showed employers added fewer jobs last month than economists forecast while the unemployment rate dropped.
Nonfarm payrolls rose by 103,000 in December after a revised increase of 71,000 in the previous month, the Labor Department reported. The median forecast of 78 economists in a Bloomberg News survey was for a gain of 150,000. The unemployment rate slid to 9.4 percent from 9.8 percent.
Federal Reserve Chairman Ben S. Bernanke said the drop in unemployment is likely to be slow even with a pickup in U.S. growth, signaling no change in the central bank’s monetary stimulus.
“Maybe some of the enthusiasm for long-dollar exposure has been undercut,” said Alan Ruskin at Deutsche Bank AG. “The headline number was obviously much softer than expected.”
The U.S. currency has rallied since Dec. 14, when the Fed said the economic recovery is continuing and maintained a $600 billion program of debt purchases under the second round of quantitative easing. The dollar got a boost as President Barack Obama signed into law last month an extension of tax cuts.
The dollar will fall about 12% to $1.48 per euro and drop 7% to Y78 by the end of 2011 as the Fed keeps interest rates close to zero and the fiscal deficit stays near a record, according to JPMorgan Chase & Co.
“U.S. growth alone cannot support the dollar as it’s highly unlikely that the Fed will be lifting interest rates in the next 12 months,” said John Normand, strategy at JPMorgan.
The euro was headed for a weekly drop of 3.1% against the dollar on speculation Europe’s sovereign-debt crisis will persist. The decrease in the euro would be the biggest since it fell 3.2% during the five days ended Nov. 26.
European Central Bank President Jean-Claude Trichet said in text of an address today in Bavaria that governments shouldn’t rely on the ECB to get Europe out of its debt crisis and urged more efforts to tighten fiscal rules.
Dragged lower by euro-yen, USD/JPY has slipped to Y82.85 as bids to Y82.80 are slowly eroded. While Y82.80 area contained slippage Thursday, accompanied by chatter of Asian sovereign demand, no such talk has been heard today, one trader says. Risk may be for stops below that level to trigger a fast move to Y82.50 if exposed.
Barclays Capital strategists note that both Japan's Nikkei 225 and Topix indexes have broke above key Fibonacci swing targets at 10,481 and 927.52 respectively,"While we had been looking for a bullish break in the range, we did not anticipate one so soon," they say. Barclays targets an initial test of 10,675 in the Nikkei, the "same area as the equal head and shoulders target which comes in at 10,700." The Topix "equal swing target" comes in at 948.54.The Nikkei closed at 10,541.04.
EUR/USD failed to recover to $1.2945 area after seeing lows around $1.2915, the recovery likely as much due to a let-up in selling ahead of the London close as anything else, though a clarification of earlier SNB/Portugal bonds talk may also be helping.
Resistance 3:Y84.50 (high of December)
Resistance 2:Y83.90 (Dec 21 high)
Resistance 1:Y83,60 (session high)
Current price: Y83.48
Support 1:Y83.20 (session low)
Support 2:Y82.90 (Jan 6 low)
Support 3:Y82.60 (38,2 % FIBO Y80,90-Y83,60)
Comments: the pair becomes stronger. The nearest resistance - Y83,60. Above growth is possible to Y83.90. The nearest support - Y83,20. Below losses are possible to Y82.90.
Resistance 3: $ 1.5590 (resistance line from Dec 31)
Resistance 2: $ 1.5560 (Jan 6 high)
Resistance 1: $ 1.5475 (session high)
Current price: $1.5436
Support 1 : $1.5430 (Jan low, session low)
Support 2 : $1.5350 (around of Dec 22, 28, 29 and 30 low)
Support 3 : $1.5290 (low of September)
Comments: the pair decreases. The nearest support - $1,5430. Below decrease is possible to $1.5350. The nearest resistance - $1,5475. Above growth is possible to $1,5560.
Resistance 3: $ 1.3200 (50.0 % FIBO $1.3430-$ 1.2970)
Resistance 2: $ 1.3150 (38,2 % FIBO $1.3430-$ 1.2970)
Resistance 1: $ 1.3020 (session high)
Current price: $1.2990
Support 1 : $1.2970 (session low, low of November and December)
Support 2 : $1.2800 (61,8 % FIBO $1.1870-$ 1.4280)
Support 3 : $1.2650 (low of September)
Comments: the pair remains under pressure. The nearest support - $1,2970. Below decrease is possible to $1.2800. The nearest resistance - $1,3020. Above growth is possible to $1,3150.
07:00 Germany Current account (November) unadjusted, bln 12.0 - 12.1 (11.7)
07:00 Germany Trade balance (November) unadjusted, bln 11.8 15.0 14.2
07:00 Germany Retail sales (November) real adjusted -2.4% 1.0% 2.3%
07:00 Germany Retail sales (November) real unadjusted Y/Y 2.0% 3.1% -0.7%
08:00 UK Halifax house price index (December) -0.4% -0.1%
08:00 UK Halifax house price index (December) 3m Y/Y -0.8% -0.7%
10:00 EU(16) Unemployment (November) 10.1% 10.1%
10:00 EU(16) GDP (Q3) revised 0.4% 0.4%
10:00 EU(16) GDP (Q3) revised Y/Y 1.9% 1.9%
11:00 Germany Industrial production (November) seasonally adjusted -0.3% 2.9%
11:00 Germany Industrial production (November) not seasonally adjusted, workday adjusted Y/Y 10.6% 11.7%
12:00 Canada Employment (December) - +15.2
12:00 Canada Unemployment rate (December) - 7.6%
13:30 USA Nonfarm payrolls (December) +140K +39K
13:30 USA Unemployment rate (December) 9.7% 9.8%
13:30 USA Average hourly earnings (December) 0.1% 0.0%
13:30 USA Average workweek (December) 34.3 34.3
20:00 USA Consumer credit (November), bln 2.0 3.4
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