Talking Points:
– USDOLLAR Holds Monthly Opening Range Ahead of NFP Report
– EUR/USD Remains Capped by Former Support as ECB Ventures Into Uncharted Territory
– USD/CAD Breakout Gathers Pace Ahead of Canada Employment Report
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) has given back the market reaction to the European Central Bank (ECB) rate cut as it falls back from a fresh monthly high of 10,541, but we may see greenback consolidate ahead of the highly anticipated Non-Farm Payrolls (NFP) report as the reserve currency holds above the opening monthly low for June.
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10494.09
10541.05
10490.28
-0.32
170.52%
Despite expectations for seeing another 215K rise in U.S. employment, the jobless rate is expected to increase to an annualized 6.4 percent from 6.3 percent in April, and a mixed batch of data print may continue to produce range-bound prices in the greenback as the Federal Reserve sticks to its current approach for monetary policy. At the same time, Average Weekly Earnings are projected to increase an annualized 2.0 percent during the same period following the 1.9% expansion the month prior, but we would need to see a marked pickup in wage growth to see a more material shift in the Fed’s policy outlook as Chair Janet Yellen retains a dovish outlook for inflation.
With that said, the USDOLLAR remains at risk of carving another lower top as long as it holds below the April high (10,572), and the greenback may face additional headwinds going into the Fed’s June 18 meeting as the central bank remains in no rush to normalize monetary policy.
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Read More:
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Euro May have Bottomed on Post-ECB Tumbles. Why?
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Holds Opening Monthly Low, But Remains at Risk of Carving Lower-High
Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
Interim Support: 10,354 to 10,375 (50.0 retracement)
Release
GMT
Expected
Actual
Challenger Job Cuts (YoY) (MAY)
11:30
—
45.5%
Initial Jobless Claims (MAY 31)
12:30
310K
312K
Continuing Claims (MAY 24)
12:30
2625K
2603K
Household Change in Net Worth (1Q)
16:00
—
Fed’s Narayana Kocherlakota Speaks on Interest Rates
17:30
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— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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Source: Daily fx