The dollar is weaker today as the US is set to announce their seventh Non-Farm Payroll this year. Economists and investors alike anticipate this news to see whether the jobs market and output is going to come out with signs of retraction again. Here are some concepts followed by some of the best setups for USD pairs before Friday's NFP.
The US expects to report yet another decline in output during this recessionary period. Forecasts say that the number of jobs added in the month of July will be 122K less than in June, marking the fifth contraction in a row.
Although monthly growth is exceeding analyst expectations, the rate is still slowing down. Investors should be keen not to be fooled by a beat in forecasts if GDP is still declining. On top of that, the unemployment rate is expected to increase as well by another 0.1%.
This could spell weakness for the dollar, even as interest rates rise. So, here are a few setups that we think are the best going into the week bearish or bullish.
Best Setups for USD
UJ continues to slide on a strong yen as the BOJ decided that no intervention was required to find economic growth. The overall trend is still on the upside for the most part, but signs of a shift in momentum just happened on the 1D timeframe. Price broke under a long term trend line and is headed toward support around 131.407. Additional support doesn't look clear until the 125.100s-126.300s.
NZDUSD shoots higher on the day as the dollar sinks from weak outlook. Price has already broken above a falling trend line and is pushing towards resistance around 0.63918. Further resistance lies above around 0.65505 should price break higher.
GU inches toward resistance around 1.23300s. Its correlation to the US stock market has reflected price action and will likely continue its trend upward until the SPX500 turns the other way. Up until NFP, the pair may rise higher towards 1.233 and 1.244 which is another level higher. It is unclear whether or not the bear market has ended, but price looks like it will continue to rise going into Friday's report.
On Friday this past week, the United Kingdom’s Office for National Statistics released the latest reports on the UK’s Gross Domestic Product (GDP), a means of measuring economic output. It was revealed that their economy grew by -0.6% month-over-month, and -0.1% quarter-over-quarter, which entails a contraction for both timeframes. Although these numbers are less disastrous […]
This week the public received startling news: on Wednesday morning, month-over-month CPI (a proxy for inflation) in the United States had unexpectedly remained static, clocking in at 0% whereas a moderate 0.2% increase had been forecast. Core CPI (which excludes food and energy prices) likewise came in lower than anticipated at 0.3% month-over-month, while Thursday […]
Next Tuesday, the RBNZ will announce their new official bank rate which is expected to be 3%, a 0.50% rise from July. This hike will make it the highest yielding major currency on the market. Here is why you should consider buying the kiwi before Tuesday's decision as well as some strong NZD long setups. […]
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