US Dollar gains on Employment report

Intermediate

2nd – 6th December 2019

USD

The Dollar closed the week with a bang after the US jobs report smashed expectations. At the beginning of the week, the Dollar spent the first four trading days of the month selling off and started to look rather oversold by Thursday afternoon. With the very positive jobs data on Friday, however, reporting +266k, we instantly saw USD bulls enter the market and the Dollar pushed higher very quickly and rather aggressively. As a result of this, the Dollar Index (DXY) finished the week taking two days worth of losses back and finally closed at 97.68.

EUR

A rather interesting week for the Euro, we saw the EUR/USD Forex rate hold below resistance around the 1.1100 mark, even though the Dollar was heavily selling off in the early-part of the week. However, when US Dollar strength returned on Friday, EUR/USD sellers made an impulsive entry back into the market and pushed the price below 1.1050. This was only temporary, however, and the pair quickly rejected this level and went on to close the week just above at 1.1060.

GBP

The Pound started to truly breakout last week after traders started to bet on and price in a Conservative win in the UK General Election, which is on Thursday 12th December. A Conservative win is seen as a stepping stone in the right direction for the all important Brexit deal . After a very strong start to the week, towards the end of the week we saw GBP/USD sell off slightly and find support at the all important 1.3000 level, from where it started to rebound higher on Friday. This leaves the door open to both bullish and bearish scenarios leading up to Thursday.

GBP/USD went on to finish the week just above 1.3100.

The Week Ahead

For the week ahead, it will likely be a very volatile week, as we have the all important FOMC rate decision and statement on Wednesday evening, as well as  the ECB rate decision on Thursday. On the same day we also have the UK General Election, so positioning ahead of these events could start to appear within the FX markets with traders pricing in expectations for these events.

On the macroeconomic front as well as the all important rate decisions and  UK general election,  we will also be faced with the German ZEW economic sentiment on Tuesday, US CPI Wednesday, and US Retail Sales to finish the ever so hectic week off on Friday.

So be careful, expect volatility, and enjoy! Until next week, Happy Trading!

Editor

Bryce has over 3 years of experience managing his own personal investment portfolio. In 2018 he completed a BA (Hons) degree from the University of Sussex in Event Management. He then went on to ta...continued

Comments on this analysis

Your email address will not be published. Required fields are marked *


Latest Related News

Euro surges after ECB PEPP expansion (EURUSD Forecast)

The “risk on” theme that has extended into early June has kept the safe haven US Dollar in a weakened position, sending EURUSD higher since latter May.The acceleration higher over the past 24 hours was driven by the European Central Bank (ECB) confirming larger than expected increase of EUR600bln for its Pandemic Emergency Purchasing Programme (PEPP).Here we look at the EURUSD forecast into today and… Continued

Pound upside risks with a weaker US Dollar (GBPUSD Forecast)

The “risk on” phase has extended through late May into this week, with global stock averages surging to new cycle highs.In the Forex world, the US Dollar continues to weaken (alongside the Japanese Yen), seen very much as a safe haven currency in the COVID-19 world.The positive global view continues to be driven by hopes the easing of lockdowns and the reopening of the global… Continued

Equity bull theme resumes (despite US-China tensions)

Macroeconomic/ geopolitical developments The positive “risk on” theme was again reinforced by additional positive steps regarding the launch of an €750bn EU recovery fund. The “risk on” theme was evident despite tensions between the US and China increasing in late May, intensified by developments surrounding Hong Kong.However, President Trump did not indicate economic sections and was seen as less dramatic than feared at Friday’s press… Continued

US Dollar weakens across the Forex board

US Dollar Index breaks key support (DXY forecast)Euro-Dollar breaks up (EURUSD forecast)Aussie-Dollar major resistance weakens (AUDUSD forecast) Continued

Euro upside risks – EURUSD Forecast

The “risk on” theme continues with global stock averages again pushing to new cycle highs, and the US Dollar stays relatively weakened as a safe haven currency.Here we review the positive outlook for the EURUSD forecast. EURUSD day trade outlook: Upside risks through key 1.1039, maybe for critical 1.1147 A Wednesday rally to overcome notable 1.1009/19 rebound peaks, to build on Monday's small dip and… Continued

Forex Brokers in your location