Weaker Jobs Data Seen
The US Dollar is pulling back from recent highs today across early European trading. A weaker JOLTS job openings number yesterday has caused profit taking ahead of the NFP on Friday. Given the Fed’s current focus on employment levels, labour market readings have taken on greater importance. Last month, a surprise uptick in the NFP saw traders quickly dismantling expectations of a deeper .5% cut at the November FOMC, leading USD higher. However, if we see a downturn in labour market readings this month (NFP forecast at 11k vs 243k prior), dovish pricing could creep higher again, certainly for December, causing further a USD unwind.
ADP & GDP Due Today
Looking ahead today, there is room for USD selling to deepen if we get any undershooting on the ADP reading and advanced GDP release. The ADP is forecast at 110k from 143k prior while GDP is seen unchanged at 3%. If confirmed at these levels, market impact is likely to be muted. However, given the reaction to yesterday’s JOLTS number, any downside today should lead USD lower through the end of the week into Friday’s data. Ahead of that data we’ll also get the latest core PCE reading tomorrow, forecast to have ticked up slightly to 0.3% from 0.1% prior.
Technical Views
DXY
The rally in DXY has stalled for now atop the 104.05 level. With momentum studies fading fast, a deeper move lower can develop if we break back below the level with 102.46 the next support to note. While above, however, focus is on a continuation towards 105.97 and a test of the bear trend line next.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.