First and foremost, the non-farm payrolls figure does not move the markets these days. That US labor market is on fire is not news anymore. Fed is more interested in seeing a pickup in wage inflation. So the focus is on wage growth numbers.
In fact, super strong payrolls could end up reminding markets about the slack in the labor market.
Coming to FX markets… Pound is on the back foot and could take a beating due to strong US wage growth figures.
Cable daily chart
- The bearish outside day candle and a weak follow through today indicates the recent bullish move has topped out.
- The 100-DMA (1.2480) is still sloping downwards.
- So don’t be surprised to see the pair dips below 1.2412 (Jan 31 low) on the back of strong US wage growth figures.
- Also note, the sell-off has just begun, hence the pair is more likely to under perform other majors on a potential dollar sell-off following weak US wage growth numbers.
Major support – 1.2412, 1.23, 1.2250
Major resistance – 1.2538, 1.26, 1.2706