GBP/USD, EUR/USD, AUD/USD, USD/JPY – U.S. Dollar Rallies After Jobs Data

Key Insights

• GBP/USD moved towards the 1.1900 level as U.S. dollar rallied against a broad basket of currencies after the release of the strong job market data. 
• USD/JPY continued its strong rebound and tested the resistance at the 20 EMA. 
• Commodity-related currencies suffered a strong pullback as commodity markets moved lower. 

U.S. Dollar Moves To New Highs

U.S. Dollar Index gained strong upside momentum and moved towards the 105.20 level after the release of job market data from the U.S.

ADP Employment Change report showed that private businesses added 235,000 jobs in December, compared to analyst consensus of just 150,000. Initial Jobless Claims report showed that 204,000 Americans filed for unemployment benefits in a week. Analysts expected Initial Jobless Claims of 225,000.

The reports were bullish for the U.S. dollar as the Fed is trying to put some pressure on the job market in order to fight inflation. If the job market stays in a decent shape, the Fed will be more hawkish.

Meanwhile, the Services PMI report  indiceated that the services industry remained under significant pressure. This report did not put any pressure on the American currency as traders focused on job market data.

EUR/USD Is Under Pressure

EUR/USD declined towards 1.0520 as traders reacted to the U.S. jobs data. Traders also had a chance to take a look at the inflation data from Italy and Construction PMI from Germany, but these reports had minimal impact on currency dynamics.

In case EUR/USD manages to settle below 1.0520, it will head towards the 1.0500 level. A successful test of this level will push EUR/USD towards the support at 1.0480.

GBP/USD Tries To Settle Below 1.1900

GBP/USD gained strong downside momentum and pulled back below the 1.1900 level. Today, UK reported that Services PMI improved from 48.8 in November to 49.9 in December, compared to analyst consensus of 50.

The report had minimal impact on GBP/USD as traders focused on the jobs data from the U.S.

AUD/USD Retreats Amid A Pullback In Commodity Markets

AUD/USD declined towards the 0.6750 level amid a broad pullback in commodity markets.

Other commodity-related currencies were also moving lower in today’s trading session. NZD/USD managed to settle below the 0.6250 level and is testing the 50 EMA at 0.6210. USD/CAD moved towards 1.3570 despite the rebound in the oil markets.

USD/JPY Tests Resistance At The 20 EMA

USD/JPY continued its strong rebound as traders focused on the rising probability of aggressive rate hikes from the Fed after the release of the U.S. jobs data. Currently, USD/JPY is trying to settle above the 20 EMA at 133.90. In case this attempt is successful, USD/JPY will move towards the next significant resistance at 134.50.

For a look at all of today’s economic events, check out our economic calendar.