Friday, 2 Oct 2009

Markets Await the Release of the Non Farm Employment Report

The Dollar has been experiencing a mixed trading day so far ahead of U.S. non-farm payrolls and this weekend's meeting of the Group of Seven leading industrial nations in Istanbul. Traders remain cautious, pulling back from risky assets and equities, with market sentiment remaining largely negative after Thursday's disappointing Institute of Supply Management survey and jobless claims data left investors worrying about the economic recovery. The EUR was little changed at $1.4543, after dropping to $1.4503 earlier, the weakest level since Sept. 10. It reached $1.4844 on Sept. 23, the highest level in a year.

The Yen rose as concerns over the U.S economic recovery mount due to continues rise in unemployment and loan. The Japanese currency is headed for a second week of gains against the EUR on speculation G7 finance officials meeting in Istanbul this weekend will discuss the European currency's strength. The Yen strengthened to 130.09 per EUR from 130.35 in New York yesterday. The yen was at 89.43 per dollar from 89.40.

The Non Farm Employment Report and Unemployment Rate due to be released today at 12:30 GMT continue to dictate today's trading. With yesterday's release of disappointing U.S economic data, there is growing concern the employment change is higher than expected. If this is the case and the result is worse than expected we are likely to see the current trend of risk aversion intensified and Dollar and Yen pushed higher versus the riskier currencies as a safe haven refuge.

AUD/JPY upward Correction Imminent

A bullish correction may be imminent for the AUD/JPY. A breach of the lower Bollinger band is evident on the 4 hour chart, with the RSI floating in the overbought territory. Furthermore a fresh bearish cross is evident on the Slow Stochastic chart.