USD/NOK dives on weak NFP figures from April
|- US NFP increased by 175K in April, below expectations of 243K, following March’s revised increase of 315K.
- Unemployment rose slightly to 3.9% while wage inflation decelerated.
- The odds of a cut in September by the Fed rose significantly.
The USD/NOK pair is trading at 10.861, exhibiting a decline of 1.19% on Friday’s session. The USD faced downward pressure as markets are now betting on higher chances of a rate cut by the Federal Reserve (Fed) in September, following the report of weak Nonfarm Payrolls.
April's NFP report from the US showed a gain of 175K jobs, which was significantly below the market expectation of 243K and a decrease from March's revised figure of 315 K. This slowdown in job growth, combined with the slight rise in the unemployment rate from 3.8% to 3.9%, points towards a cooling labor market. Moreover, the wage inflation rate also dipped from 4.1% to 3.9% annually, suggesting softer wage pressures, which can influence the Federal Reserve's approach to monetary policy. The report's overall outcome, reflecting a deceleration in several key employment metrics, highlights a potentially weakening economic momentum.
This supports a more cautious monetary policy approach, aligning with the Federal Reserve's recent moves towards policy normalization and possibly setting the stage for a first cut in September which according to the CME FedWatch tool, increased above 50%.
USD/NOK technical analysis
On the daily chart, the Relative Strength Index (RSI) for the USD/NOK pair has moved into negative territory. The indicator was trending positively, nearing overbought conditions, but then reversed to bearish, signaling a tendency for a sell-off. Concurrently, the Moving Average Convergence Divergence (MACD) histogram prints red bars, confirming the presence of strong selling pressure.
Analyzing the broader outlook, it's crucial to note the USD/NOK has made significant strides today, dipping below its 20-day Simple Moving Average (SMA). However, the pair remains firmly above the 100-day and 200-day SMAs. This reveals a potentially bearish short-term trend but confirms the bullish long-term position of the USD/NOK.
USD/NOK daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.