US dollar rises after strong non-farm payroll data

The price of crude oil rallied after OPEC and its allies agreed to retain production at the current level in March. Before the virtual meeting, analysts were expecting the cartel to boost production as the world economy recovers. The price also rose after the US Senate voted to advance Joe Biden’s $1.9 trillion stimulus package. They will vote for the bill during the weekend or early next week. Oil price ignored the recent inventory numbers by the Energy Information Administration. They showed that stocks rose by more than 25 million barrels last week.

The US dollar held steady against most currencies after the latest nonfarm payroll numbers. Data by the Bureau of Labour Statistics (BLS) revealed that the American economy added more than 379,000 jobs in February. This figure was better than the median estimate of 182,000. The private nonfarm payrolls were 465,000, higher than ADP’s estimate of 117,000. Meanwhile, the unemployment rate declined from 6.3% to 6.2% while the average weekly hours fell from 35.0 to 34.9. The average hourly earnings remained unchanged at 5.3% 

It was a sea of red in global stocks as investors focused on the bond market. In Europe, the CAC 40, DAX, and Euro Stoxx dropped by more than 0.50%. Similarly, futures linked to the Dow Jones and Nasdaq 100 indices dropped by 0.15% and 0.40%, respectively. This happened after the yields of the ten-year US bonds rose to above 1.50% again as inflation expectations soared. Analysts believe that inflation will keep rising and force the Fed to hike rates.

EUR/USD

The EUR/USD pair declined to 1.1913 after a speech Jerome Powell made yesterday. On the hourly chart, the pair moved below the 15-period and 25-period moving averages. It is also between the lower and middle lines of the Bollinger Bands while the signal and main line of the MACD have moved below the neutral line. The moving average of oscillator is also below the neutral line. Therefore, the pair may continue falling as bears target the next support at 1.1850.

XBR/USD

The XBR/USD pair rose to a multi-month high of 68.27. On the four-hour chart, the price has managed to move above the important resistance level at 66.70. It also moved above the yellow ascending triangle pattern and all moving averages. The MACD has risen sharply while the Relative Strength Index (RSI) has moved close to the overbought zone. Therefore, the pair may continue to rise as bulls focus on the 70 level.

GBP/USD

The GBP/USD pair declined sharply today because of the dollar strength and the disappointing UK house price data. On the four-hour chart, the price managed to move below the support at 1.3860. It also moved below the Ichimoku cloud while the MACD and other oscillators declined. The pair may continue falling as bears target the next support at 1.3700.