U.S. Dollar (DXY) Pulls Back After Non Farm Payrolls Report

Key Insights

• U.S. Dollar Index is moving towards the 109 level. 
• EUR/USD continues its attempts to settle above the key 1.0000 level. 
• Commodity-related currencies enjoy support as commodity markets rebound. 

U.S. Dollar Declines Ahead Of The Weekend

U.S. Dollar Index (DXY) is moving lower after the release of economic data from the U.S. The important Non Farm Payrolls report indicated that the economy added 315,000 jobs in August, compared to analyst consensus of 300,000. Unemployment Rate grew from 3.5% in July to 3.7% in August due to the increase in Participation Rate.

Traders also had a chance to take a look at the Factory Orders report for July. The report indicated that Factory Orders declined by 1% month-over-month, compared to analyst consensus which called for an increase of 0.2%.

The job market reports have put some pressure on the U.S. dollar. However, the difference between the analyst consensus and the actual data is not significant, and it remains to be seen whether the Non Farm Payrolls report will have any impact on Fed’s decisions.

EUR/USD Attempts To Settle Back Above 1.0000

EUR/USD failed to settle below the 0.9950 level and moved back to the 1.0000 level. Today, EUR/USD traders had a chance to take a look at Euro Area Producer Prices data for July.

Euro Area Producer Prices increased by 4% month-over-month in July, compared to analyst consensus of 2.5%. On a year-over-year basis, Euro Area Producer Prices grew by 37.9%.

High energy prices push Producer Prices to higher levels. After a few months, rising Producer Prices will push Inflation Rate to new highs. The ECB cannot ignore the challenging situation on the inflation front, so traders bet on an aggressive rate hike. Such bets provide support to EUR/USD in the 0.9900 – 1.0000 range.

Meanwhile, GBP/USD continues its attempts to settle above 1.1550. While GBP/USD received support near the 1.1500 level after the major sell-off, it remains to be seen whether bulls have enough firepower to push GBP/USD towards 1.1600 as the market remains focused on the weakness of the UK economy.

AUD/USD Rallies As Commodity Markets Rebound

AUD/USD gained strong upside momentum and moved towards 0.6850 as commodity markets rebounded after yesterday’s sell-off.

AUD/USD managed to settle above the resistance at 0.6825 and is testing the resistance level at 0.6850. In case this test is successful, AUD/USD will head towards the next resistance level, which is located at 0.6880. A move above this level will push AUD/USD towards the resistance at the 20 EMA at 0.6900.

On the support side, the previous resistance at 0.6825 will serve as the first support level for AUD/USD. If AUD/USD declines below this level, it will head towards the next support at 0.6800.

Other commodity-related currencies also enjoy strong support today. USD/CAD declined below the 1.3100 level, while NZD/USD moved towards 0.6130.

USD/JPY Pulls Back Towards 140

USD/JPY has recently made an attempt to settle above 140.80 but lost momentum and pulled back towards the 140 level.

Most likely, the Japanese yen will remain volatile near this key level. At this point, it needs significant catalysts to break the current downside trend.

For a look at all of today’s economic events, check out our economic calendar.