4 min read The August Non-Farm Payrolls (NFP) report was released, showing job gains of 162k in the U.S, well ahead of forecasts of 56k and July’s losses were revised away.
The U.S. unemployment rate remained unchanged at 4.1% as expected. Wage growth was 0.3% MoM, in line with projections.
The report suggests that the labour market is powering through despite uncertainty from the Middle East conflict lifting oil prices and inflationary pressures. The data shows that the labour market is resilient enough for the Fed to focus on inflation.
The market has slightly raised expectations for a September Fed rate hike, to a 60% chance of a hike, up from 50% prior.
The markets are responding with the S&P 500 falling while the USD is rising.
DOLLAR INDEX (DXY):
The USD trades +0.15% at 98.90 following the data, but continues to trade below the 50 and 200 EMAs on the 4 hour chart, keeping the outlook bearish. Buyers would need to retake 99.50 resistance and 99.80 the September high to turn the chart more bullish.
DOLLAR VS YEN (USD/JPY):
If we take a closer look at the technicals, we can see that USD/JPY has found support at 155.30, the July low as the USD strengthened following the data, bringing the RSI out of overbought territory. Sellers will need to take out this support to create a lower low.
S&P 500 (SDX):
The S&P 500 trades within a symmetrical triangle pattern. The price ran into resistance at 7750 and has eased lower but remains above the 200 and 50 EMAs. Buyers will look for a breakout above 7750 to create a higher high. Sellers will look for a break below 7700 to and 7650 for a more bearish outlook.
Trading involves risk.
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