Huge US payrolls miss deflates dollar

Slobodan Drvenica Windsor Brokers

The dollar fell to ten-week low after huge US payrolls miss on Friday sparked fresh risk aversion as job growth well below forecasts boosted expectations that Fed would keep its ultra-low rates for a longer period.

The greenback was down nearly 1% in past two days as fresh bearish acceleration after multiple upside rejection under thickening daily cloud cracked key support at 90.37 (Apr 29 former low), clear break of which further weaken the structure on completion of failure swing pattern on daily chart.

Bears eye pivots at 90.16/00 (Fibo 76.4% of 89.15/93.45 rally / psychological) and could extend towards key points at 89.66/15 (Feb 25 spike low / 2021 low, posted on Jan 6, the lowest since Apr 2018).

Daily studies are in full bearish setup and support the action, as the index is on track for bearish weekly close that adds to negative signals.
Broken Fibo 61.8% of 89.15/93.45 (90.79) and falling 10 DMA (90.86) mark solid barriers which need to cap potential upticks and keep bears in play.

Res: 90.55; 90.79; 90.86; 91.02

Sup: 90.16; 90.00; 89.66; 89.15

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.