NFP Details Still Leave Room for Doubt

The dollar surged on Friday after the release of the surprisingly good Non Farm Payroll figure that posted a monthly decline of only -11,000 jobs compared to an expected -125,000.Without doubt, on the surface this was an excellent result but deeper analysis showed that the improvement was mainly due to an 58k job increase in the service sector, which could well be just seasonally driven.In addition, there were still declines registered in the more longer term jobs sectors such as construction(27k) and manufacturing(41K). There are now about twice as many Americans out of work since the start of the recession and many experts are predicting that it will take to 2014 until this pattern is fully reversed.As such, we really need to see other indicators confirming growth before acknowledging that this recession has truly bottomed out.On Friday, the EURUSD crashed by over 100 pips whilst the USDYEN surged to 89.50. Overnight, the EURUSD has fallen by another 100+ pips(see chart) following Trichet re-claiming that Euro interest rates were appropriate and poor German factory orders falling by 2.1% versus an expected 0.8%.Should the EURUSD achieve a true and confirmed break of 1.4800, which it seems to be doing, then the ensuing down-tread could see the pair realising further substantial losses especially if backed by increasing risk aversion.