The latest US jobs report was a blockbuster, and on a fundamental basis it should have driven the US dollar sharply higher. That is precisely what happened at first against several major currencies, including the JPY, EUR, GBP and CAD.

Employment data such as this—most notably the monthly nonfarm payrolls figures from the US Bureau of Labor Statistics—is among the most market-moving releases on the economic calendar, because it feeds directly into expectations for Federal Reserve policy. Better-than-expected job growth is typically read as keeping interest rates higher for longer, which tends to support the dollar.

However, the expected effect does not always follow the fundamental cause—at least not for long. One reason is that price may run into an important technical level where traders are willing to take profits, enter in the opposite direction, or define their risk. Fibonacci retracement levels—such as the 38.2% marks referenced below—and widely watched moving averages are two of the most common tools traders use to identify such levels, which is why reactions around them can be pronounced. In those situations, technicals can stop—or even reverse—the initial move.

In the video above, the market's reaction to the US jobs report is examined across the USDJPY, EURUSD, GBPUSD and USDCAD. Despite the strength of the data, price action across those pairs has been mixed.

For the USDJPY, price initially moved higher following the report. However, the rally stalled near 156.69, where the 38.2% retracement of the prior day's decline provided resistance.

That retracement level was an important hurdle. A sustained move above it would have shown that buyers were beginning to take back more control. Instead, the price could not break through the resistance, buying momentum faded, and sellers pushed the pair sharply lower toward the low for the day—and the low for the week—near 155.285.

The lesson is straightforward: strong economic data may give buyers a reason to act, but price must still break through the technical levels standing in the way. When it cannot, disappointed buyers may exit and sellers can regain control.

For the EURUSD, the pair initially moved lower as the dollar strengthened. The price fell below its 100-hour moving average at 1.1602, giving sellers greater control. Short-term moving averages like the 100-hour are often used by intraday traders as a dividing line between bullish and bearish momentum. However, the decline stalled near the next important support level—the 38.2% retracement of the move up from the late-July low at 1.1573.

The inability to break below that retracement level encouraged buyers to step back in, leading to a rebound. The 100-hour moving average at 1.1602 now becomes a key barometer. If price remains below it, sellers retain the short-term advantage. If price moves back above it, sellers may become disappointed, potentially leading to additional short covering and a further move higher.

The GBPUSD followed a similar pattern. It initially moved lower as the dollar strengthened, but the decline stalled before reaching the next support area between 1.3473 and 1.3480. The low reached 1.3484—just above that support zone.

When sellers could not push the price through the next downside target, some began taking profits and buyers entered against the support. That sent the pair back toward the 100-hour moving average and the broken 38.2% retracement near 1.35206.

That area is now close resistance and the next important decision point. Staying below 1.35206 keeps sellers in play with the potential for another rotation toward 1.3473–1.3480. A move back above it, and the failed downside break could lead to more short covering.

The USDCAD has been the exception. The combination of a stronger-than-expected US jobs report and a weaker Canadian employment report gave the pair two fundamental reasons to move higher. This divergence—strong US data coinciding with weak Canadian data—is a classic setup in cross-border pairs, where both sides of the currency pair carry independent fundamental drivers. Unlike the other currency pairs, the USDCAD has maintained its upside momentum.

Technically, the 200-day moving average near 1.3836 is now the key risk-defining level. The 200-day moving average is one of the most widely monitored benchmarks for longer-term trend direction, which is why a break above or below it often attracts attention beyond short-term traders. Staying above that moving average keeps the bias more bullish today and going forward. A move back below it would weaken the bullish technical picture and suggest that buyers are losing some control.

Overall, the strong US jobs report was the cause, but the effect across the foreign-exchange market has been mixed. Technical levels played a major role in determining whether the initial dollar move continued, stalled, or reversed. Going forward, the levels outlined above—the USDJPY area near 156.69 and 155.285, the EURUSD 100-hour moving average at 1.1602, the GBPUSD decision point at 1.35206, and the USDCAD 200-day moving average near 1.3836—are the reference points to watch for signals about which side retains control.

For traders, that is an important lesson. Fundamentals can provide the reason for a move, but price action and technical levels show whether buyers or sellers are actually maintaining control. Knowing those levels allows traders to define their bias, manage their risk, and avoid being surprised when the expected effect does not follow the fundamental cause.

Source: USD Technicals: US dollar has a mixed reaction to blockbuster US jobs report