Dollar Down after as NFP Provides No Shock

Action Insight Mid-Day Report 7-7-23

Dollar Down after as NFP Provides No Shock

Dollar falls broadly after US non-farm payroll report didn't provide any shock to the markets. Nevertheless, the headline job growth was still solid, with unemployment rate steady, and wages growth staying at a relatively high level. US 10-year yield dipped initially following the release by quickly recovered. Stocks futures attempted to pare earlier against but failed so far. It remains to be seen if selling in the greenback would pick up any momentum, and whether risk-off sentiment will come back.

Elsewhere in the markets, Canadian Dollar is also relatively unmoved, except versus the greenback, despite strong Canadian employment data. Yen is currently the strongest one thanks to earlier rebound today. Sterling is the second strongest, but it doesn't really excel much again Euro and Swiss Franc. Aussie appears to lack any momentum to get out of one of the week's worst position.

Technically, CAD/JPY's earlier dive today and break of 107.64 support should confirm short term topping at 109.48, ahead of 110.87 higher. Deeper decline is now in favor in the near term to 55 D EMA (now at 104.74). Reactions from there would reveal whether fall current fall is a correction to rise from 94.04 only, or the third leg of the pattern from 110.87.

In Europe, at the time of writing, FTSE is down -0.24%. DAX is up 0.48%. CAC is up 0.57%. Germany 10-year yield is up 0.024 at 2.651. Earlier in Asia, Nikkei dropped -1.17%. Hong Kong HSI dropped -0.90%. China Shanghai SSE dropped -0.28%. Singapore Strait Times dropped -0.35%. Japan 10-year JGB yield rose 0.0248 to 0.436.

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USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 143.53; (P) 144.10; (R1) 144.63; More...

Intraday bias in USD/JPY is back on the downside with break of 143.54 temporary low. Deeper decline would be seen as corrective fall from 145.06 extends. But still, overall outlook remains bullish with 140.90 resistance turned support intact. Break of 145.06 will resume larger rise to 161.8% projection of 127.20 to 137.90 from 129.62 at 146.93.

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EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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Economic Calendar
GMT Ccy Events Actual Forecast Previous Revised
23:30 JPY Labor Cash Earnings Y/Y May 2.50% 1.20% 1.00% 0.80%
23:30 JPY Overall Household Spending Y/Y May -4.00% -2.40% -4.40%
05:00 JPY Leading Economic Index May P 109.50% 97.50% 96.80%
05:45 CHF Unemployment Rate Jun 2.00% 2.00% 2.00%
06:00 EUR Germany Industrial Production M/M May -0.20% 0.10% 0.30%
06:45 EUR France Trade Balance (EUR) May -8.4B -9.5B -9.7B -10.6B
07:00 CHF Foreign Currency Reserves (CHF) Jun 725B 734B
08:00 EUR Italy Retail Sales M/M May 0.70% 0.10% 0.20%
12:30 USD Nonfarm Payrolls Jun 209K 220K 339K 306K
12:30 USD Unemployment Rate Jun 3.60% 3.70% 3.70%
12:30 USD Average Hourly Earnings M/M Jun 0.40% 0.30% 0.30% 0.40%
12:30 CAD Net Change in Employment Jun 59.9K 19.8K -17.3K
12:30 CAD Unemployment Rate Jun 5.40% 5.30% 5.20%
14:00 CAD Ivey PMI Jun 50.9 53.5