Trade Setups in USD-pairs Ahead of July US NFPs
- EURUSD rebounds above $1.0900, but below triangle support.
- USDJPY flagging above key ¥124.60/65 region.
- See the August forex seasonality report.
With each passing day, markets seem to be pricing in a higher and higher probability of the Fed raising rates in September. The veracity of the perceived oncoming hawkishness will be put to a test today when the July US Nonfarm Payrolls report is released, the second to last labor market report before the Fed's September gathering.
Coming into today's print, the path has been anything but clear for the US Dollar, economically speaking. Since last Friday, when the Q2'15 US Employment Cost Index (ECI) was released, the greenback has been tethered to intraweek reactions around event risk. The reality is that there hasn't been consistency in the data (despite its general improvement over recent weeks, per the Citi Economic Surprise Index): the ECI plummets; factory orders jump; ISM Manufacturing disappoints, ISM Services surge; the ADP private payroll tracker slumped; and jobless claims hovered near a four-decade low.
--- Written by Christopher Vecchio, Currency Strategist
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