The U.S. dollar moved away from session lows in holiday-thinned trade as traders kept digesting Non Farm Payrolls data. Rate-hike bets provided some support to the greenback even as weak jobs figures pressured the bulls, while EUR/USD, GBP/USD, USD/CAD and USD/JPY each carved out their own path.
The U.S. Dollar Index rebounded from recent lows as traders continued to work through the latest Non Farm Payrolls report. The FedWatch Tool shows a 45.9% probability that the Fed will raise the federal funds rate by 25 bps in September. Those rate hike expectations lend the currency some support, though the disappointing job market data put pressure on the bulls.
Dollar index holds its support
The dollar index failed to settle below the support at 100.50 – 100.65 and rebounded above the 100.80 level. A climb above 101.00 would open the test of resistance at 101.15 – 101.30. On the downside, a successful test of 100.50 – 100.65 clears the way toward the next support at 99.75 – 99.90.
Euro and pound edge higher
EUR/USD moved higher as traders bet the Fed could turn less hawkish than previously expected. If the pair holds above support at 1.1420 – 1.1435, it heads toward resistance at 1.1500 – 1.1515; a break below 1.1420 pushes it to the 50 MA at 1.1394.
The pound, meanwhile, kept testing the same level. GBP/USD continued its attempts to settle above resistance at 1.3335 – 1.3350. A break higher targets 1.3450 – 1.3465, while a slip below 1.3335 opens the 1.3300 level and then support at 1.3250 – 1.3265.
Loonie and yen diverge
USD/CAD gained despite a rally in precious metals, as gold climbed above $4150 and silver settled above $62.40. The pair is trying to hold above its 50 MA at 1.4206, with resistance waiting at 1.4225 – 1.4240.
USD/JPY, by contrast, tried to recover after a pullback driven by profit-taking, with traders cautious about intervention risks. Whether the Bank of Japan has enough firepower to scare bulls remains unclear, and previous attempts to support the yen failed as the currency tested multi-decade lows. The pair is working to reclaim resistance at 161.50 – 162.00, with recent highs at 162.80 the next hurdle above.
Source: FXEmpire
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