U.S. Dollar Moves Away From Session Lows As Traders Buy The Dip
U.S. Dollar Index is losing ground as traders react to the weaker-than-expected Non Farm Payrolls report. The report indicated that the economy added +29,000 jobs, compared to analyst forecast of +90,000. The previous report was revised from +162,000 to +133,000.
Unemployment Rate increased from 4.1% in August to 4.2% in September, exceeding the analyst consensus of 4.1%.
Job market data had a material impact on Fed policy outlook. The probability of a rate hike at the meeting in October declined to 21.6%.
Interestingly, traders have already started to buy the dip. In case U.S. Dollar Index settles above the 102.00 level, it will head towards the nearest resistance, which is located in the 102.35 – 102.50 range. A successful test of the resistance at 102.35 – 102.50 will open the way to the test of the next resistance at 103.35 – 103.50.
EUR/USD Remains Stuck Near Support At 1.1250 – 1.1265
EUR/USD gained some ground after the release of U.S. job market data but has already lost momentum and pulled back towards the 1.1250 level.
In the EU, traders focused on inflation data. Euro Area Inflation Rate increased from 3.2% in August to 3.8% in September, compared to analyst forecast of 3.6%. Core Inflation Rate increased from 2.4% to 2.5%, in line with analyst estimates.
In case EUR/USD manages to settle back below the 1.1250 level, it will head towards the support at 1.1175 – 1.1190.
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See all EUR/USD forecastsGBP/USD Rebounds After Yesterday’s Pullback
GBP/USD moved higher, supported by the disappointing Non Farm Payrolls report. I’d note that Treasury yields continued to move higher despite weaker-than-expected job market data. The yield of 2-year Treasuries settled above the 4.82% level, while the yield of 10-year Treasuries moved above 5.26%.
If GBP/USD climbs above the 50 MA at 1.3247, it will head towards the resistance level, which is located in the 1.3285 – 1.3300 range. On the support side, a move below the 1.3200 level will open the way to the test of the support at 1.3035 – 1.3050.
USD/CAD Tests The 1.4250 Level
USD/CAD continues its attempts to settle above the resistance at 1.4235 – 1.4250 as traders focus on the pullback in precious metals markets. Other commodity-related currencies are moving higher in today’s trading session.
In case USD/CAD manages to settle above the 1.4250 level, it will head towards the next resistance level, which is located in the 1.4350 – 1.4365 range. RSI has recently pulled back into the moderate territory, so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
USD/JPY Climbed Back Towards The 158.00 Level
USD/JPY rebounded from session lows as traders focused on rising Treasury yields. The yield of 30-year Treasuries climbed back above the 5.62% level as bond traders remained bearish.
In Japan, traders had a chance to take a look at the Unemployment Rate report for August. The report showed that Unemployment Rate increased from 2.4% to 2.5%, compared to analyst forecast of 2.4%.
The nearest resistance level for USD/JPY is located in the 158.00 – 158.50 range. A successful test of this level will push USD/JPY towards the next resistance at 160.00 – 160.50. It remains to be seen whether BoJ is ready to intervene in case USD/JPY climbs above the psychologically important 160.00 level.
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