US Dollar Rally Needs a Fresh Boost From US Payrolls Report (NFPs)
US Dollar (DXY) Price Analysis and Charts.
- US dollar (DXY) primed for a US payroll move.
- Average earnings a key component of the report.
US Dollar (DXY) on Hold as Monthly US Payroll Report Looms
The US dollar has had a strong second half of the week and approaches highs not seen since May 2017 after Wednesday’s FOMC meeting revealed a slightly-less dovish outlook, paring back market expectations for an interest rate cut in 2019. The greenback also received a boost from the latest ADP employment change data that showed 275k new jobs created in April, trouncing expectations of 185k and March’s revised number of 151k. While the correlation between ADP data and NFPs is not exact, the overall picture still shows a robust US jobs market. Today’s average hourly earnings will be closely parsed to see if the tight jobs market is pushing wages higher, which if true would give US domestic inflation a nudge higher further down the line.
The daily US dollar (DXY) chart shows the greenback falling out of extreme overbought territory but still higher. While the series of higher lows and higher highs was broken on March 20 and April 2 respectively, the bullish momentum in place since the start of the year remains in control. The old ‘double-top’ horizontal highs at 97.22 are currently acting as minor support ahead of the release, while the current spot price is just 40 ticks away from setting a fresh two-year high. One way or another, todays NFP release will drive price action in the short-term at the end of what has been a very busy week for data and events.
US Dollar (DXY) Daily Price Chart (August 2018 – May 3, 2019)
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--- Written by Nick Cawley, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.