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September 2, 2021

How To Trade Important USD Economic News Tomorrow

Frank Cabibi

9/2/2021

This week's news reported mostly good numbers so far for the USD as PMI beats expectations as well as unemployment claims. The dollar dipped as a result of this, and investors may be looking to more risk-on trades for the remainder of this week.

Our outlook

The dollar appears weaker on this news, however, it also looks like the better bet against certain pairs like AUDUSD and USDJPY. The USD struggles against CAD, the euro and the pound. I think this news is probably a potential short play on most of the major pairs, but we will also have to look to the end of the week tomorrow to see what the US unemployment rate will be along with NFP.

Trade Setups

GBPUSD

GU crossing above both the 50 and 200 DMA today while nearing a falling trend line on the 1D chart. A break above this level would be very bullish for the pair as the USD looks weaker with inflation concerns.

EURUSD

EURUSD on the 1D chart has already broken a falling trend line and crossed above its 50 DMA. The pair looks like it has a lot of momentum going into tomorrow, but it depends on whether the US can beat unemployment rate or not. A beat would probably mean bullishness for this pair as the Fed may start looking to taper earlier or raising rates sooner.

AUDUSD

Although this pair has had a considerable run to the upside, the USD still looks stronger than the buck as the US is rebounding much quicker than Australia. But, this level of resistance here around .74200s is going to be a big decider in the pairs direction. A close above this level could mean a larger move to the upside.

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