Chinese data impresses ahead of Non Farm Payrolls

The FX markets are trading this morning in their usual pre non-farm payrolls (NFP) consolidation period after yesterday’s Draghi inspired Euro rally.

I don’t believe ECB President Draghi was neither hawkish or Dovish and sat nicely on the fence, swerving Italian political questions whilst making it clear that the ECB have all the necessary tools available in keeping the market guessing on a potential rate cut.

The single currency traded from 1.2990 to 1.3120 as the market was caught short with the main action seen in the crosses with EUR/CHF, EUR/GBP, EUR/JPY and EUR/AUD all showing short covering gains with the stand out $ move being against the JPY, as we make new highs above 95.00.

Chinese data impressed overnight ahead of Saturday’s release of inflation (CPI), Industrial production and retail sales data. Overnight the Chinese trade data revealed a trade surplus of $15.25 billion versus the consensus for a deficit of $6.9 billion with the standout component showing exports up 21.8% against the expected 8.1%.

German industrial production is likely to be largely ignored this morning with all eyes on the US  jobs report this afternoon. The ADP employment report on Wednesday showed the average monthly data above the 200k level and today’s all important NFP is expected to come in at 163k following the rise of 166k last month. The unemployment rate is expected to dip 0.1% to 7.8%. This is likely to be an important report as the market looks to gauge the risk on $ bid themes with the US data continuing to outperform raising the ‘taper’ stimulus debate again.

EUR/USD

Supports 1.3040-1.3000-1.2960 | Resistance 1.3130-1.3220-1.3300

USD/JPY

Supports 94.80-94.50-93.80 | Resistance 95.70-96.00-97.50

GBP/USD

Supports  1.4940-1.4900-1.4875 | Resistance 1.5025-1.5080-1.5150