The reaction in the markets was muted this morning following the release of the U.S. ADP jobs data report.  The report showed that employers cut 84,000 jobs in December.  This was down from 145,000 jobs lost in November. The adjustment to the November figure was positive as it was originally estimated that 169,000 jobs were lost.

Although the stock indices rallied on the news, the move was muted as traders await this morning’s ISM Service report. Later in the day, the Fed’s Minutes will likely be a market mover.  Traders seem reluctant to chase the stock indices higher at this time ahead of this morning’s regular session opening.  

After trading lower overnight, March Treasury Bonds are mounting a strong comeback following the release of the ADP Report.  Yesterday the main trend turned up on the daily chart.  The chart pattern suggests that a rally back to 117’15 is possible if upside momentum can continue.  Position evening and profit-taking following a long sell-off ahead of this Friday’s U.S. Non-Farm Payrolls report may be the force behind the building strength.

February Gold is trading better despite the slight improvement in the Dollar.  The chart pattern suggests that this market is well on its way to completing a major 50% retracement of the $1227.50 to $1075.20 range at $1151.30.  

March Crude Oil is trading in an inside range while maintaining its underlying bullishness. Former tops at 82.81 and 83.60 remain the key resistance points.  Weakness may develop under 81.82 which could set the table for a break to 78.08 to 77.01 over the near-term.  Speculators are driving this market higher in anticipation of improved demand.

The U.S. Dollar rallied overnight following yesterday’s closing price reversal bottom.  The first objective was met at 77.77. Upside momentum took the market to the upper end of the retracement range at 77.93.  The Dollar may run into some resistance in this area, but a lot will be determined by today’s ADP jobs report and ISM Service report.

The main trend is down on the daily chart, but conditions could shift if 78.22 is penetrated.  Breaking back under 77.77 will be the first sign of weakness.  If this occurs then look for a resumption of the downtrend with 76.31 to 75.80 the next downside objective.
The March Japanese Yen is trading lower overnight.  At this time, this currency is completing a retracement of the 1.0731 to 1.0964 range at 1.0848. Fundamentally, traders are reacting to an improving global economy while expectations remain for the Japanese economy to remain under pressure.  News of Finance Minister Fujii’s resignation put slight pressure on the market as this event seems to have been already priced in.

The March Euro weakened into a retracement area at 1.4350 to 1.4319.  Holding this area gives bullish traders hope that the Euro will begin to mount a strong retracement of the 1.5144 to 1.4217 range to 1.4680 over the near-term.  Traders will be watching for news regarding a possible bailout of Greece.  Overnight, the Euro weakened after ECB member Juergen Stark said that markets cannot assume other nations will bail out Greece.

The main trend remains down in the March British Pound but this market is trying to establish support in a retracement zone at 1.6036 to 1.5988.  Holding this zone could trigger a short-covering rally.  Tomorrow the Bank of England will hold its first meeting of the year. Expectations are for the BoE to hold interest rates steady while continuing to provide stimulus to the economy in hopes of the start of a recovery.
The March Swiss Franc is showing strength at this time following a test of a 50% price at .9640.  Look for the strength to continue as long as this market remains over .9612.  The bigger picture suggests a rally to .9806 is possible following today’s short-term correction.  Gains could be limited as traders are anticipating a possible intervention by the Swiss National Bank if the currency continues to appreciate against the Euro.

The March Canadian Dollar traded in an inside range overnight with a slight bias to the upside.  The direction of gold and crude oil will continue to exert the biggest influence on this currency pair.  .9741 is resistance. .9574 remains the support.
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