Big Day for USD
The US Dollar is on watch today as traders brace for the latest NFP release as well as the outcome of the Supreme Court’s ruling on Trump’s tariffs. Ahead of these events, the US Dollar is continuing to push higher today, currently on course to print its fourth consecutive winning day, while ending the week firmly higher.
NFP On Watch
Looking at the US labour reports first. The market is expecting the headline NFP to print 66k from 64k prior with wages rising to 0.3% from 0.1% and the unemployment rate cooling to 4.5% from 4.6%. If seen, this data should keep USD well supported near-term, keeping rate cut expectations muted through Q1. Given that a cut this month is priced around 10% the bigger impact should be on March pricing where a cut is currently priced around 40%. If we see any upside surprise in today’s data, this should see USD rallying sharply as March easing expectations plunge. On the other hand, any downside surprise today, while unlikely to impact January expectations, should see March easing expectations rising, capping the rally in USD.
Supreme Court Ruling
Away from the jobs data, traders will be waiting for the Supreme Court’s decision on whether Trump can invoke the IEEPA in order to action tariffs without the approval of Congress. If the court rules against Trump this will lead to a massive refund action reimbursing corporates who’ve already paid out levies. Such a ruling is broadly expected to be USD positive meaning that we could see USD firmly higher into the weekend if we get both a positive NFP release and a court ruling against Trump today.
Technical Views
DXY
The rally in DXY has seen the market trading back up to test the 99.15 level. With momentum studies bullish, focus is on a break higher here and a test of the 100.36 level next. This is a key pivot for the market a break above this level will signal room for a much higher push in DXY. To the downside, 98.24 remains the key support to watch.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% and 73% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.