Chicago Fed’s Evans: Jobs report is good news
Chicago Fed’s Evans said the jobs report is good news,in a CNBC interview. The data help support his 2016 outlook but admitted there is still probably a little slack in the labor market. He thinks the discussion will move to the path of interest rates, which will determine the relative restrictiveness of policy. He added that what’s important, and where the real uncertainty lies, is inflation and whether the FOMC will be confident that price pressures will be moving higher toward the 2% target. He repeated that the target should be symmetric. He concurred with Yellen’s recent comments that December is a “live” meeting, though he goes into every meeting with an open mind. Evans is a voter this year and while he sure seems to be leaning in the direction of liftoff next month.
US Dollar Index, 240 min
US Dollar index (DXY) in which EURUSD has a 60% weighting rallied higher after trending higher over the last few days. With the NFP report surprising so strongly to the upside DXY moved higher in a parabolic manner to the 99.44 resistance level. This resistance was created by a pivotal resistance in April this year. This resistance coincides with a channel high in the 4h chart while the Stochastics are in the overbought territory. This suggests many of the dollar pairs are getting near support levels and the immediate downside in those pairs is getting limited and the dollar longs are taking money off the table.
EURUSD, 240 min
Just like the US Dollar index is reacting lower from a resistance EURUSD is reacting higher from a support area. The area between 1.0666 and 1.0752 is a support that attracts some euro buying due to profit taking and DXY being at resistance. The downside momentum should prevail even after rallies higher. The 1.0837 former support should attract sellers and is a level where I’m looking for shorting opportunities.
NZDUSD, 240 min
NZDUSD dropped strongly on the USD strength. The pair is down by 1.33% since yesterday’s close. The move was an overshoot from the downward sloping channel and was stopped (at least momentarily) by a 50 day SMA. The nearest support level is at 0.6448 while the 0.6585 is a level I look for shorting opportunities at.
Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.
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