It’s jobs day in the US and Canada so let’s look at some trading levels
First, the numbers;
- NFP expected at 200k vs 200k prior
- Unemployment rate 4.0% exp vs 4.1% prior
- Average earnings 0.2% exp vs 0.3% prior m/m
- 2.8% vs 2.9% prior y/y
- Average work 34.4 exp vs 34.3 prior
- Participation rate 62.7% prior
A word on wages. The y/y number has dipped in Q1 pretty much every year for the last 4 years. I t’s not nailed on to do so today but it’s something to bear in mind.
- Employment change 20k exp vs -88k prior
- Unemployment rate 5.9% vs 5.9% prior
The Canadian jobs market is all over the place once again. The two strong months we saw in Nov & Dec were torpedoed last month. It’s a real lottery this month. In USDCAD, we’re still holding the 1.2860 support that we have all week but we’re close to that now so it won’t stand up to a good number. Given how the NAFTA/Tariff situation is more in Canada’s favour now, ideally, I’d like a bad number to hit another short into 1.30, as that level has been strong all week too, and is just far away enough to be a decent stretch point. Unless the jobs numbers are a complete outlier, the NAFTA/trade stuff should re-assert itself back into the PA. Obviously we’ll have to see what’s happening on the USD side too.
And to that, and USDJPY. I expect 106.00/20 to offer good support on a mild miss, 105./0 & 105.50 are the levels I’m watching for a fade on anything more. Topside, 107.00 is a bit close so 107.20, 50 and 85/90 will be the where I’ll look for fade shorts, again, depending on what’s come out.
I’m still keeping my sights on the 1.2200, 1.2160/70 & 1.2100 downside, and 1.2500 upside mainly. Inside of that I’m a bit more neutral but I can see 1.2250 supporting a none too crazy miss, and 1.2350/60 on a mild beat. Topside resistance continues onto 1.2370/90 and 1.2400/10, and then yesterday’s highs.
1.3900/10 would be topside choice and 1.3750/60, 1.3735/40 and 1.3700 are the levels I see underneath.
Unless we see any big variations in the wages and headline NFP, this shouldn’t be too volatile. We all know ehere the Fed is at and one jobs report won;t change their mind. That won;t stop the algos from jumping all over any big changes.