Forex Trading Library

Have You Bought the Dollar?

0 292

Nothing stood in the way of the American dollar on Friday. But nothing should have been a surprise. The United States economy has been recovering during the past several months. One of the most important indicators is the Unemployment Rate which dropped to 5.8 % and the market is expecting it to drop some more in the first Quarter of 2015.

Friday the Non-Farm Payrolls was highly expected by investors. Right before the publication, EURUSD was trading around 1.2360. After it was released by 90K (321K) above expectations, the currency pair suddenly dropped towards the local low from 1.2279 and broke it. For the moment it is trading just below 1.2290.

This price may not stay here for long. The European single currency doesn’t have a fundamental support to remain at this level. The Bundesbank has lowered German growth forecasts. The German Central Bank substantially cut its growth forecasts for the country. GDP was revised down to 1.4% in 2014, 1.0% in 2015 and 1.6% in 2016. While in its previous report it was shown that the Bundesbank is expecting a growth of 1.9% this year, 2.0% in 2015 and 1.8% in 2016.

Taking this scenario into consideration, we expect the Euro to continue its down trend against its major counterparts.

USDJPY hit another multi annual high above 121.80 and it has, for the moment, no reasons to start an important correction. GBPUSD broke the key level support from 1.5588. USDCAD is struggling to break 1.1470. If it will succeed, we might see this pair rallying towards 1.1500. NZDUSD broke 0.7700, key level of support, and it is now free to move down to 0.76. We are asking you again: Have you bought the dollar?

Today we are not expecting high volatility of the market, unless something unexpectedly appears. Usually the first Monday after the NFP (Non-Farm Payrolls) the Forex Market has low volatility. Italy has a Bank Holiday, Switzerland is publishing the Retails Sales and the CPI, while in the Euro Area the Sentix Investor Confidence is expected to be released. From Canada the market will get Building Permits and Housing Starts.

Australia NAB Business Confidence is on the way and UK will release the Manufacturing Production. We are expecting low volatility for the first days of the week. The US dollar is still our favorite currency. Keep an eye open for the geopolitical problems, Ukraine will be paying Gazprom $378m for gas supplies.

Leave A Reply

Your email address will not be published.