1.The dollar staged a swift recovery against a basket of six majors on the stellar U.S. jobs report. However, the dollar rebound still remained below its H4-period trend resistance.
2.Both U.S. treasuries and stocks declined sharp in the wake of the strong jobs report, with three major indexes posting biggest weekly losses in two years. Be aware of risks that other stock markets around the world could follow Wall Street lead to drop.
The dollar staged a swift recovery against a basket of six majors on the stellar U.S. jobs report last Friday 2 February. However, the rebound still remained below its H4-period trend resistance. According to the official data, 200,000 jobs added in the U.S. economy in January versus prior consensus forecasts of 180,000 added with unemployment rate remained steady at 4.1%. Meanwhile, annualized average hourly earnings grew by 2.9%, easily beat its previous reading and expectations. The jobs report impact was not limited to the FX as both U.S. treasuries and stocks declined sharp in the wake of the strong jobs report, with three major indexes posting biggest weekly losses in two years. Be aware of risks that other stock markets around the world could follow Wall Street lead to drop.
The dollar index (DXY) swift rally remained below its H4-period EMA60 before retreated in a choppy move. Its short term moving averages went higher and reached its long term moving averages which contracted slightly after remained steady and bearish, acting as stiff resistance. Look at the potential changes in the short-term and long-term moving averages.
（DXY H4 chart）
As to non-USD currencies, the euro fell back from highs above its H4-period trend support. It seemed to have some potential to recover again early this morning. The British pound declined to hit its support at h4-period EMA60 within its short-term corrective consolidation. Look for another potential rebounding. The Aussie dollar has dropped to its daily trend support. With relatively stronger downside momentum and larger losses, be aware of the potential rebound in the commodity currency to correct the prior downswing in the short term.
（AUDUSD daily chart）
Switching gears to precious metals now, the gold declined sharply to its support at H4-period EMA144 after breaking out the prior trading range. Continued extension of downtrend could bring the price to test its daily trend support. Its pointing-lower short term moving averages remained steady and bearish while its long term moving averages turned lower after flattening on the 4 hour chart. Whether or not the long term moving averages could drift into the mode of divergence will be important to observe.
（Gold H4 chart）
By JasonZou —— Chief Analyst of AvaTrade China
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.