Dollar Upside Seen Into NFP
NFP In Focus
All eyes are on the latest US jobs report due later today. Following a stronger ADP number earlier in the week and softer-than-forecast jobless claims yesterday, USD bulls are hopeful for an encouraging number today. Wall Street is forecasting the headline NFP number at 58k down from 130k prior, with any beat on that estimate likely to keep USD supported. Wages are expected slightly lower at 0.3% from 0.4% prior, while the unemployment rate is expected steady at 4.3%. Fed easing expectations have been decimated near-term in line with the surge in oil prices as a result of the conflict with Iran. An expected inflationary uptick has seen traders pushing out easing expectations as far as September. Against this backdrop, any upside surprises in today’s data will be firmly bullish for USD.
Iran Headlines
Alongside the data, traders will be monitoring incoming headlines relating to the situation in the Middle East. The view now is that the US will continue with strikes on Iran for 1-2 months. While the conflict continues, energy prices should push higher, furtehr dampening Fed easing expectations. In this context, USD should find fresh bullish momentum. Only a surprise cessation of the violence and news that both sides will negotiate is likely to shift the current market dynamic here meaning risks of a break lower in USD appear muted for now.
Technical Views
DXY
For now, price remains anchored around the 99.15 level following the breakout above the bear channel highs. With momentum studies bullish, focus is on a fresh push higher with the 100.36 level the next bull target while price holds above 98.24.
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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.