Jobs Data Adds to Bearish USD View
The US Dollar is trading firmly lower on Monday following the latest set of US jobs data on Friday. Despite the headline NFP coming in above forecasts at 206k vs 198k prior, downward revisions to the previous data and a fresh falling wages growth and a rise in the unemployment rate have done little to revive bullish USD sentiment here. Indeed, despite the higher headline NFP print, payrolls data is down sharply from the 310k peak seen in Q1 this year, highlighting a growing trend of weaker jobs data on the back of downward revisions to the two prior NFP readings.
Inflation & Powell On Watch
Looking ahead this week, the big focus for traders will be US inflation due on Thursday with Powell due to give his semi-annual testimony at Congress on Tuesday and Wednesday. With inflation, traders will be watching to see if there was a fresh over lower in consumer prices last month. If seen, this will bolster September easing expectations, driving USD lower near-term. Indeed, we’re now seeing pricing creeping higher for a further cut this year beyond September with CME group now pricing in at least .5% worth of cuts by year end. If data and commentary from Powell this week strengthen that view, DXY looks vulnerable to a sharper drop lower near-term.
Technical Views
DXY
The sell off in the Dollar has seen the market breaking below the bull channel lows, now testing the 104.97 support once again. With momentum studies bearish, a break here will open the way for a test of 104.05 next with 102.49 sitting below as deeper support.
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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.