DXY Slips on Jobs Miss
The US Dollar is turning lower again today on the back of weak labour market data yesterday, potentially warning of softer readings to come at tomorrow’s headline NFP release. The JOLTS job openings number fell to 7.67 million from 7.91 million prior, below the 8.09 million the market was looking for. On the back of the weaker labour market data we’ve seen in recent months, the market remains highly sensitive to incoming labour market readings. Today’s ADP number (expected 144k from 122k prior) should prove to be just as important for markets ahead of tomorrow’s headline data.
US Recessionary Fears
At the start of August, global markets were seen roiling as US recessionary fears took centre stage in response to a much-weaker-than-forecast NFP release. While these fears have largely subsided in recent weeks, the current USD sell off shows that concerns still linger, signalling high volatility risk for tomorrow's release.
NFP Forecasts
On the data front tomorrow, the market is looking for the headline NFP to print 164k from 114k prior with the unemployment rate to tick back down to 4.2% from 4.3% prior. Finally, wage growth is expected to rise to 0.3% from 0.2% prior. If seen, readings in these regions should help steady the US Dollar near-term. However, if we see any undershooting of forecasts, this will likely once again put the focus on US recession risks leading to further downside in USD near-term.
Technical Views
DXY
The bounce off the 100.93 level has run out of steam with price now turning back down sharply towards the level. With momentum studies turning lower, risks of a fresh downside break are growing, putting focus on 99.67 as the next support to watch. Topside, 102.46 remains the key near-term hurdle for bulls.
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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.