Excited Markets Empower Dollar Rally

Overnight, the US Dollar struggled against the other major currencies although, in general, the markets were comparatively calm in wake of the all-important US Non Farm Payrolls.

All this adruptly changed with the recent releases of the US NFPs and Annual Unemployment Rate. These were events were certainly worth waiting for with the NFPs sensationally falling by only 11K versus an expected 125K whilst the Annual Unemployment Rate also dropped from 10.2% to 10%.

A breakdown of the excellent NPF result showed gains were both achieved within the service sector of 58K and educational/health of 40k although losses were recorded in construction of 27K and manufacturing of 41k.

After taking about 10 minutes to absorb this unexpected but excellent news, the dollar surged dramatically against other majors. The EURUSD plummeted by over 150 pips within minutes to lows of 1.4915 until it retracted to its present value of 1.4940(see chart)

Similarly, the USDYEN surged through its 50 Day SMA at 89.57 hitting highs of 89.85 before retreating to its current value of 89.50.

With a number of serious bearish technical crossovers achieved in the last hour, the day should bring further EURUSD declines as the markets respond to what could be regarded as the most positive economic news produced this year.