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USDJPY<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Dollar strength was seen on the session following the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />US non farm payrolls report.  Although the actual figure fell well below the 125,000 estimate by the market consensus, at 51,000 for the month, there was some optimism that rate cuts would not be needed heading into year end.  According to the September employment report, the unemployment figure dropped to a five year low of 4.6 percent as the previous months result was revised higher to a 188,000 addition.  Coupled with the known fact that wage inflation remains well buoyed, traders are now, albeit in the short term, beginning to bet on no rate cuts in the next three months as consumer spending is likely to keep the economy supported in the near term.  As a result, a likely focus will shift to next weeks trade balance and retail sales figure.  Should US retail sales increase, it would mean stronger consumer resolve.

On the Japanese yen side, economic data was thin and disappointing.  With only the leading economic and coincident indexes scheduled for the day, it was hardly a session for bears to dominate.  For the month, both indexes showed tepid figures with the coincident index showing a higher than consensus figure.  Against weaker expectations of a 75 percent print, the figure was supportive, released at a 77 percent.  However, the leading economic indicator was noticeably weaker, declining to a 20 from Julys 27 release.  Although bearish, the reports may be slightly overstating reality as both are simple compendiums of previously released data.

CADJPY

In similar fashion, the market bid the CADJPY cross higher in the North American session, ranked as second on our top market movers for the day.  The move was somewhat surprising considering the highly correlative relationship with crude oil contracts, which have for the most part been to the lowside.  Previous settlement had the commodity priced at below the $60 a barrel benchmark, far below the $78.40 record high set back in July.  Nonetheless, the pair moved higher and was attributed to a better than expected employment picture for the worlds ninth largest economy.  With the consensus looking for a slight addition to the overall labor force, market participants were pleasantly surprised when the net change in employment was significantly higher than expected, about 16,200 for the month.  The addition more than equalized the previous figure which pitted a loss for the labor force of 16,000 workers and boosts the notion that rate cuts may not be needed in order to spur further growth.  Subsequently, the additions have contributed to a lower national unemployment rate, taking the actual rate lower to 4.6 percent compared to a 4.7 percent stat in August.

Finding support at 104.50, the CADJPY continued off of the momentum from yesterdays move.  Now with consolidation likely ahead of the close, the bears are likely to attack the 23.6 percent fib at 105.33 where light bids are likely to support the move.  Even lower, defenses are looking heavier with plenty of buyers looking to cap a bear slide lower to the 105.10 (38.2 percent fib level from the aforementioned move).  Conversely, should the momentum continue through the overnight, bulls will likely attempt to take out the 105.75 before moving onto the 106 handle.

NZDUSD

With no economic data scheduled for the day, traders continued to take profits on long kiwi positions.  Furthered by the overall positive sentiment following the release of the US employment report, the New Zealand dollar continued through key technical levels after a retest o the 0.6650 resistance ceiling.  Current market speculation, however, will be tested as next weeks calendar may offer more bullish sentiment as the NZIER business opinion survey is released in the beginning of the week.  Additionally adding to potential Kiwi strength will be the US trade balance report.  Should the survey surprise, as it has done in the past, expect for further carry traders to begin loading up.

Technically speaking, price action seems concentrated on the nearly completed head and shoulders pattern.  Textbook in the 60-minute, the head and shoulders is likely to exacerbate selling on a break of the neckline support at 0.6560.  Should the bearish scenario unfold, bids are likely to be light at the 0.6550 with more formidable buyers attempting to pick a bottom right above the 6500 handle.  However, the current scenario does not preclude a jump higher as offers are ready to cap any bull run to the 0.6650 figure once again.