NFP Numbers Interrupt the Bullish Euro and SPX Trend

NFP data released today gave a bullish surprise for the US dollar. The expected number was 200k, and the actual release printed at 275k.

That’s a significant jump from the 229k for the previous month, but 353k was the original figure for last month, so the reading is mixed with today’s data. The EUR/USD also had a mixed reaction, initially jumping higher but ending the day lower.

The positive surprise should be considered bullish for the US dollar, but the number revised lower for last month is bearish. The initial reaction saw the Euro bulls lead the way, but the rest of the NY session saw dollar bulls take the lead.

Looking at the EURUSD chart below we can see how today’s candle may be showing signs of faltering at the resistance level offered by the cloud. The day isn’t over yet, but it looks like the Euro isn’t going to manage a green candle in this session.

A stop at such a level could bring a short retracement in price action. Although it would be difficult to imagine a long run south. I say this given that I believe the prevailing sentiment will be that the Fed is on track to lower rates quicker than the ECB.

Stocks also Suffer

The SPX also turned south today, although the stock index also had a mixed reaction after the data release. The morning session was driven by the revised data for last month dropping 124k jobs, driving the index higher.

In fact, the bullish turn sent the index to a new all-time high shortly after the news. However, sentiment changed for the afternoon session as hawkish fears began to pervade. The SPX was down 0.08% at the time of writing.

That turn in heart would be due to 275k new jobs, which is still a bullish number. Especially when we consider that 150k is the number considered to support an expanding economy. So, we can see how fears can arise that this data may stall the Fed’s decision to pick a pivot point further into the year.

Given the recent rally, which has been on full steam ahead since late October 2023, we may find that the recent ATH is also a turning point for a short retracement. Technically it shouldn’t come as a surprise. But in my opinion, the latest NFP number isn’t enough to change Fed policy on its own. This means dips in EURUSD or SPX are a buying opportunity, at least for now.