USD & Stock Indices: Stirred Not Shaken

The lower than expected 142K Jobs vs. 201K data on the NFP figures posted a sudden decline of the USD, measured by the DXY registered a 95.20 low upon the release of the report. The natural reaction of the market were felt across the board on the European majors. Where the Euro rose to the 1.1318 levels and Cable's similar reaction towards 1.5237 in a similar fashion. Meanwhile, the Dow Jones touched 16k and with the SP500 @1893 levels respectively was likewise the initial price swing we've seen that held well for a few hours since then, while Gold had an excellent rally leading to the 1141.15 high from an 1104.00 low just before the news report.

With an early reaction from the US trading session, the next six hours of trading had a different tune towards the closing session. The stocks have recovered from the previous lows just to come up positive at the end of the week's trading activity. Where bull traders have simply gained back their footing and worked thru the market's lower prices realizing the fact that the economy was not as bad as others have thought, so they say! Yet, this has led a corrective price adjustments to be a good time to re-position in the near term as there were still no real signs of a heavy turn over or hands changing except for those who have maintained to the sidelines when the declined occurred.

These are the classic & correlated pullbacks mentioned; where sudden price movements are made post risk events that can make or break positions for traders and investors. As the much anticipated higher jobs figure were contradicted by the actual figure was a blow for bulls. However, post NFP, technical perspective came into play after getting back to the drawing board and found that the USD decline has not even pierced through the 95.05 1st support levels. This was an encouraging signal while comparing its corresponding price equivalents on the Euro and Cable.

The price recovery towards the closing was not a surprise, but the momentum of the price pullback had enough momentum to hold through the closing session. This just shows how investors and traders on the bull side of the trade have gained back some relief from the decline pushing the Dow, SP500 and USD into positive territory.