US Dollar is correcting the Fed sell-off with eyes turning to the NFP event in the US session. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• US Dollar is correcting the Fed sell-off with eyes turning to the NFP event in the US session.
• The ECB gave the USD bulls a lifeline from a less than hawkish outcome than Euro bulls had hoped for.

The pair currently trades last at 101.86.

The previous day high was 101.91 while the previous day low was 100.81. The daily 38.2% Fib levels comes at 101.49, expected to provide support. Similarly, the daily 61.8% fib level is at 101.23, expected to provide support.

The US Dollar on Friday was perking back to life following a sharp fall to fresh cycle lows on the back of the Federal Reserve chairman Jerome Powell’s mixed speech, whereby markets ran with the most optimistic of the comments. Markets have preferred to focus on the prospects of continued disinflationary outcomes in the world’s largest economy and Powell gave the bulls a gift when he said that, ”the disinflationary process has started”.

However, markets took a dovish cue from policymakers at the European Central Bank and the Bank of England, who said inflationary pressures in their economies have become more manageable. The ECB raised key rates 50bp taking the MRO to 3.0%, and indicated it expects a repeat in March. Thereafter, any further hikes will be data-dependent the central bank said. Given the stretch positioning, however, the euro needed more from the event to stay up. ”EUR long positioning sits near the top of our tracking indicator, leaving it vulnerable to lofty market expectations,” analysts at TD Securities said.

Against a basket of currencies, the US Dollar index, DXY, rose to 101.90, away from Wednesday’s nine-month low of 100.80 ahead of Friday’s key Nonfarm Payrolls. Analysts at ANZ Bank explained that markets are clearly in no mood to embrace any hawkishness, ”and that could be a real limiting factor for the USD.”

Friday’s Nonfarm Payrolls event will be a critical component of the US interest rate outlook and will drive sentiment in this regard. Analysts at TD Securities are projecting payroll gains to have stayed largely unchanged vs December, posting a still solid 220k increase in January. ”Both the Unemployment Rate and average hourly earnings should have remained steady: the former at a decades-low 3.5%, and the latter printing a 0.3% MoM gain,” the analysts explained. ”Note that the January jobs report will also include important revisions to the establishment survey data for 2022,” they added.

Technical Levels: Supports and Resistances

EURUSD currently trading at 101.86 at the time of writing. Pair opened at 101.75 and is trading with a change of 0.11 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 102.29, 50 SMA 103.64, 100 SMA @ 106.6 and 200 SMA @ 106.7.

The previous day high was 101.91 while the previous day low was 100.81. The daily 38.2% Fib levels comes at 101.49, expected to provide support. Similarly, the daily 61.8% fib level is at 101.23, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 101.07, 100.39, 99.96
• Pivot resistance is noted at 102.17, 102.59, 103.27

[/s2If]
Join Our Telegram Group