The initial reaction to the February U.S. nonfarm payroll report saw the dollar move lower after the headline employment figure came in weaker than expected. Job growth slowed and several sectors posted declines, including construction, manufacturing, and leisure and hospitality. The report was also weighed down by a sharp drop in private education and health services, partly tied to strike activity. Overall, the details showed a softer labor market picture for the month, though some of the weakness may prove temporary.
Despite that initial reaction, the dollar’s decline did not last long. In many of the major currency pairs, the early move lower in the greenback ran into key technical levels where buyers stepped in. The EURUSD and GBPUSD moved higher immediately following the release, but those gains stalled near resistance. At the same time, pairs like USDJPY and USDCHF found support at important technical areas. As those levels held, the dollar began to move back higher.
This type of price action highlights the importance of technical levels in the immediate aftermath of a major data release. While the data pushed the dollar lower at first, the market quickly ran into areas where the risk for buyers and sellers was defined. Once those levels held, the bias shifted and the dollar recovered.
In the video above, I take a closer look at the technical picture across the major currency pairs and walk through what happened both immediately after the data and in the hours that followed. I break down the price action in EURUSD, USDJPY, GBPUSD, USDCHF, and USDCAD, highlighting the key support and resistance levels, what the price action says about the current bias, and the targets traders will be watching going forward.
This article was written by Greg Michalowski at investinglive.com.
