Everything went ahead and got a little bloody today.
Currency markets went through 3 blow for blow rounds of varying market conditions within a window of only a few hours following today's employment release. I can't remember the last time I wasn't in front of my computer watching this data, and today's reaction was off the marker in terms of consistency.
I looked at EUR/USD and USD/JPY for the most part. In the land of the Japanese Yen, all was relatively “normal” with the exception of the initial jerk, take-back reaction in price. When that pair goes, it goes, so to speak. EUR/USD went into a trivial mess.
Typically, after the first half hour or 45 minutes, we see a direction get declared, and that's essentially the “move” for the rest of the session, unless the data is a complete dud. Today, we had to wait until the US session was churning and burning for a half hour before this actually occurred, so a little “catch up” was necessary on the Euro. Everything started to tank. Equity markets opened significantly lower and other higher yielding assets did NOT appreciate the data and honored the headline number. Risk off, really off, for the remainder of the session (and the US market is continuing to bleed as I write).
I've got an annoying little rule that basically watches the 32% retracement for breaks in an underlying trend. When it's gone, switch gears. 50% can and does fade, but protection is available on a 1hr. or greater. Yes, you can see the level get “splashed”, etc. etc., but once it breaks, that next level is the minimum you're going to crawl to before anything happens, and most of the time, 50% (in a smaller context) doesn't hold up.
As far as this top was concerned, we were once again in spike base territory, and has a triple tap at the highs quickly breached to the downside. If you follow me on Twitter I was pointing them out, but this was not an easy one to grab after the peak itself. You really had to just short it on the third thrust to get an ideal entry on this.
As far as the Euro's move lower is concerned, sharp yet steady trends like this can only happen on rare days, and this is certainly one of them. Onto the next.
Chart Source: https://www.tradingview.com/v/XaPkd1lW/