Dollar Under Pressure
Following a strong start to the week which saw DXY testing the current YTD highs, the Dollar has since reversed and has now come under heavy selling pressure. A weaker set of JOLTS job openings figures yesterday has seen traders covering long positions. USD had initially been bolstered by news of Trump’s trade tariffs against Mexico, Canada and China over the weekend. However, with Canada and Mexico since surrendering to Trump’s border demands and Chian retaliating with tariffs of its own, initial bullish momentum was quickly diluted.
JOLTS Falls
On the data front, the JOLTS figure was seen falling to 7.6 million last month, down from 8.1 million prior, below the 8 million the market was looking for. A strong jobs market has been a key feature of the hawkish Fed outlook. If the jobs market starts to weaken now, that could quickly fuel a dovish repricing of Fed rates projections, leading USD down deeper.
NFP On Watch
With that in mind, traders now look ahead to today’s ADP print ahead of the headline NFP data on Friday. If we see any further weakness in these labour market readings, USD is likely to accelerate lower as traders rebuild Fed rate cut expectations for May and June. We also have the ISM services PMI due today, expected at 54.2 from 54.1 prior. Again, any weakness should add weight to current USD selling.
Technical Views
DXY
The failure at the retest of the broken bull channel and the 109.35 level now risks forming a lower high against the current YTD highs. While in place, focus is on a fresh push lower with 107.24 now the key pivot. Below there, 105.97 will be the next bear target, in line with falling momentum studies readings.
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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.