Bonds had a .03% drop in yield rates this morning to under 1.46% on good jobs data. Unemployment claims beat expectations by 24K less claims than forecasted which was 388K. The past few weeks had been over 400K claims, so the latest numbers under the 400K threshold is a great sign for the economy and the stock market. However, the dollar looks mixed from the good economic news and falling bond yields. NFP and unemployment data comes out tomorrow morning, and investors are anticipating some volatility in the wake of news as well.
If bond yields keep falling, it would probably look increasingly bearish for the dollar. However, yields are oscillating between the low 1.45s and 1.70s% while the the dollar index has moved 0.29% on the day. Mixed sentiment might be bearish for the dollar, but it looks like the dollar wants to climb with the stock market. Today's numbers give us a hint that we will probably see a beat in expectations in the US's unemployment numbers. As for NFP, I am not sure we will beat expectations, but it could be like the last time we saw a drop in employment change but also a drop in unemployment. My bias is that we will see a lower unemployment rate, and I think jobs will be added, but I also don't think it matters whether we beat expectations or not for the non-farm payroll report because a lower unemployment rate is bullish for USD.
The DXY shows investors have mixed feeling just from recent price action on the 4H. Long wicks shooting off in either direction suggest a period of consolidation until a candle can close above resistance around 92.410. Additional support is underneath in the area between 91.45 and 91.69.
USDCAD still looks bullish even after breaking under support on the 4H since price has recovered back above that level. Long wicks rejecting the lows and higher lows created on this timeframe suggest more movement to the upside. Tomorrow's volatility could send price in either direction, but heavy support on the top of the consolidation channel looks promising should price come down, but price looks like it will come back up to the top around 1.24692.
Dollar yen off to a phenomenal morning as price surges 0.39% on the day. The yen is now looking much weaker than the dollar due to the rebounding US economy. A highly anticipated NFP report tomorrow has brought significant attention to the dollar and everyone expects good news. New support lies around 111.133.
9/17/2021 Stocks are down -0.58% this morning after coming down to test a significant level of support once again. While stocks fall, the dollar rises in the anticipation of sooner-than-expected tapering by the Fed along with a hike in interest rates starting in 2022. Our outlook Other than September being one of the worst months […]
9/16/2021 The Euro-Dollar pair is down over 0.5% today after several days in the red. Today's speech by EU president Lagarde mentioned how the economic recovery had come quicker than expected six months ago. This was praised by the prompt vaccine distribution so citizens could get back to work. Across the pond, the US just […]
9/14/2021 This morning's report on CPI m/m and core CPI m/m came in at a lower percentage than expected which resulted in a falling dollar pre-New York session. The USD is now volatile under the uncertainty of potential tapering and rising rates while the equities market seems to be rising because of this. Our outlook […]
9/13/2021 Big money has been moving out of Australia's currency for nearly a month now which has been the biggest drop in long contracts in this amount of time year-to-date. Australia's dollar index (AXY) is up 0.06% at 73.61 on the day after rebounding from the lows around 71.19. Our outlook Australia's economy has surprised […]