Spotlight: USD Labor Market Conditions Index Change, 08/12/2014

[ Previous]

As Eric, the Senior Analyst from FX77 pointed out, the USD index got a fresh high helped by the U.S non-farm figures, ranging from 88.55 to 89.41 and eventually closing at 89.31. EUR/ USD ranged from 1.2270 to 1.2392 and closed around 1.2285. According to  United States Department of Labor(DOL) ‘s Job Report on last Friday, employers adding 321000 jobs in November, increased by 230000 compared to the expected number, hit an record-high number since January,2012. The unemployment rate in November is 5.8%.USD index rose up with a jaw-dropping speed and broke the record created in march,2009. S&P500 index also achieved a record-high 2079.45. After the announcing the figures, USD index continued rising up unstoppably, the other main foreign currencies such as EUR/JPY reached the new level 121.37 in 7 years and AUD/USD touched the record-low 0.8319 since July,2010, while EUR/USD fell to somewhere near 1.2300 again . At the meantime, the US Treasury yields get to the new altitude 0.53% since April, 2011. The payout ratio for 10-year Treasury stood in the high place 2.33%. Last but not the least, the American stock index was quite unstable after the figures’ unveiling.

World Gold Trust Services( the largest ETF in the world) got  2.39 tons inflow for the first time since last Tuesday and last Friday 0.89 ton, adding the current  ETF’s gold reserve number to 720.91.

Eric analyze that today the USD Labor market conditions index in November should become our main focus, which is no less important than non-farm payrolls. Given the

circumstances, investors should pay extra attention whether USD Labor market conditions index be able to keep gathering momentum.

[Economic calendar](GMT+8)

2014-12-08        Bank of England, the Quarterly Meeting Financial Policy Committee in London

2014-12-08        Euro Group Meeting, Brussel

2014-12-08  19:15  Bank of England’s Gracies speaks in Amsterdam

2014-12-08  22:45    ECB Announces Covered Bond and ABS Purchases

[Recap]

Eric suggests that even though US non-farm payroll looked better than expected, we must keep our mind clear so as to avoid the potential risks at 89.00 in the aftermarket .Until today, the price of gold slipped to somewhere below $1200/ Ounce and got supported afterwards around 1190 while silver stood still above 16.00! The inflow to ETF has triggered more demands for golds, especially when the price plunged to 1185. Based on experience, if the Fed is going to hike up the rate, then inflation must be around the corner. In short, placing bullish betting will be a good choice.

Gold

Resistance: 1200  1220

Support: 1188  1180

Silver

Resistance: 16.50  17.00

Support:16.00  15.80

EUR/USD

Resistance: 1.2375  1.2500

Support: 1.2300   1.2250

USD/JPY

Resistance: 121.90  1220

Support: 121.30  120.50

GBP/USD

Resistance: 1.5600  1.5800

Support: 1.5560  1.5500

[Tips]

All the information mentioned above is for reference only. The FX team will keep an eye on the market and set up the trading strategies specifically. If you are looking for more signal-providing services and investment  instructions, please pay more attention to us.

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