- The dollar remained pressure against a basket of six majors as a U.S. government-shutdown issue captured investors’ attention again. However, we could see a revival in the dollar as it still held above last week’s lows.
- We will have the major U.S. macro data at 2100 today BJT. The official jobs report will release tonight and whilst the significance of the headline NFP has decreased a bit, the wage growth is becoming increasingly important.
The dollar dropped to a new weekly low and even approached last week’s lows on Thursday 1 February as a U.S. government-shutdown issue captured investors’ attention again. The House would vote early next week to pass a short-term spending bill to avert a government shutdown, according to multiple aides. Aides said the stopgap measure would keep the government funded through March 2. We will have the major U.S. macro data at 2100 today BJT. The official jobs report for January will release tonight and whilst the significance of the headline NFP has decreased a bit, the wage growth is becoming increasingly important.
The dollar index (DXY) closed with a pattern on the 4 hour chart in Asian session today after reacting off the circa H4-period EMA30 resistance in a choppy move. Although the pattern indicated the price action could potentially form a short-term bottom above last Thursday’s lows, whether or not the index could in fact hold the level will hinge on the results of the NFP.
（DXY H4 chart）
As to non-U.S. currencies, the euro sent a short-term retracement signal as its rally failed to clear last Thursday’s highs. Look for dictations from NFP release tonight. The British pound inched higher towards last Thursday’s highs, looking for an up move to test the levels acting as resistance. The Aussie dollar rallied in New York session yesterday which could be another short opportunity as the commodity pulled back once hit its H4-period EMA60. Be on the lookout for a potential new weekly low.
（AUDUSD H4 chart）
Switching gears to precious metals now, the gold staged a rally and seemed to break out its bounding-range this week, however, the break-out has not materialize thus far as the yellow metal could not sustain its upside momentum. Therefore, we may only await the NFP release tonight. Its short term moving averages could go back above its long term moving averages on the 4 hour chart and look at the latter for a potential resumption of rising after flattening.
（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.