- The dollar reversed down as strong NFP release was offset by weaker wage growth.
- The U.S. equities soared on the biggest headline NFP increase in one and half years.
Both the dollar and the Wall Street climbed on Friday 9 March following the release of the US February jobs report which showed total nonfarm payroll employment increased by 313,000, far surpassing expectations of 200,000, and also well-exceeding January’s job creation. The 313,000 increase in non-farm payrolls was the highest in one and half years, however, it was the wage growth which showed annualized average hourly earnings rose by only 2.6%, far worse than the previous 2.9%, indicating a gradual rise in the US inflation, resulted in a reversed-down dollar and universal rally in non-USD currencies and the gold.
The dollar index (DXY) fell back to its H1-period trend support before rebounding slightly, however, it turned lower again early this morning. Therefore, whether or not the dollar would continue to whipsaw above its H1-period long term moving averages will be important to observe. The downside levels to watch in London and New York sessions lie at EMA60 and EMA169 on the 1 hour chart.
（DXY H1 chart）
As to non-USD currencies, the euro rebounded off its lows with modestly strong upside resistance on the 1 hour chart last Friday. The price action around its upside resistance will be important to watch today. The British pound inched lower after rebounding and could potentially consolidate around its H4-period long term moving averages in the short term. The Aussie dollar rally could continue after a strong rebounding last Friday, with upside resistance at 0.7892.
（AUDUSD H4 chart）
Switching gears to the precious metals, the gold nosedived to 1312.64 briefly following the NFP release before it staged a V-shape rally. The yellow metal has so far traded in a narrow range since late New York session. Watch its short-term direction in the price action with downside support at 1317.3 and upside resistance at 1328.9.
（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.