In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes reports...
How Can NFP Release Affect the USD?
2023-03-09 • Updated
In February, the NFP (Non-Farm Payrolls) delivered a great shock, surpassing the forecast by over 400%. The forecast for this month's NFP is currently tied at half of the actual figure from last month's release, which means we can expect the US Dollar to get considerably lower. Despite this sentiment, it is imperative to vet the fundamental sentiment from a technical point of view.
DXY can dip lower after breaking above the previous high, as seen above. The retracement is clearly in line with my previous analysis. I expect the Dollar to drop toward either of the two demand zones highlighted in the chart above.
Generally speaking, a weaker dollar usually has a bullish consequence on the EURUSD and most major currency pairs. Based on this, I expect to see EURUSD climb into the highlighted supply zone before any possible drop occurs.
After the bearish break below the previous low, we see that price has created a rally-base-drop supply zone that needs to be mitigated. The supply zone also coincides with 88% of the Fibonacci retracement. Moreover, the arrangement of the moving averages suggests that the price would need to reach the marked zone to find a good enough cause for a bearish continuation.
AUDUSD has the clearest picture of the bearish break below the previous low. We have also seen a double-bottom pattern at the most recent low, indicating a high likelihood that the price will retrace to the 0.6700 price region to find a reliable supply zone. After that, we may see a continuation of the bearish trend.
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In the early hours of Tuesday, the US Dollar faces challenges in maintaining its strength against major currencies, with the US Dollar Index struggling to surpass the 104.00 mark. Investors are eagerly anticipating the release of key economic data, including January Durable Goods Orders and the Conference Board's Consumer Confidence Index for February. Additionally, the economic calendar includes...
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