- The dollar index rebounded after hitting a low of 92.365. Keep an eye on H1-period EMA60 resistance.
- S. added 179,000 private sector jobs in July, according to ADP. The figure was somewhere between the previous reading and the consensus, suggesting the unemployment rate could modestly decline.
- A flash crash appeared at 23：00 GMT in gold and then brought it down towards a support on its 4 hour chart. We are Looking for clues from non-farm payroll report on Friday to see if it is a game changer or not.
The dollar index (DXY) recovered after hitting a low of 92.365. U.S. added 179,000 private sector jobs in July, according to ADP. The figure released yesterday was higher than 158,000 last month while lower than the consensus forecast of 190,000. Investment banks predicated that the economy has still been adding jobs at a relatively fast pace and the unemployment rate is expected to modestly decrease. However, the dollar turned lower after knee-jerk rebound and dived temporarily at 1700GMT to a new low of the year. In an on-going downtrend, the dollar found itself hard to get enough boosts from a mixed report. But the dollar actually regained ground as some more short-term bargain buyers stepped in after the dollar slumped so much, along with expectations on the official employment report. Whether the dollar could break the bear market structure or not still has to be seen for now although it carved out a bottom on its 4 hour chart. Putting things into perspective, it is all about the non-farm payrolls on Friday. Not only the unemployment rate and the number of jobs added or lost are critical, but also the strength in average earnings.
Price actions of the dollar have seen a significant bullish divergence in MACD indicator both on its 1 hour and 4 hour chart, and reached its corresponding long term moving averages. The dollar challenged a resistance on its 1 hour chart three times in less than 24 hours, watching a potential bullish breakout. You are suggested to be more cautious until find a clear signal of a breakout or the status quo prevails.
（DXY H1 chart）
As far as non-U.S. currencies concerned, the euro dropped back to around H1-period EMA30 once more after shooting up. Wait and see if the single currency continues the potential corrective declines or consolidates at highs. The sterling has been more of range bounding in the past two trading days and bearish divergence configuration appeared both on its 1 hour and 4 hour chart ahead of the upcoming policy decision from BOE today (at 1900 BJT). The Aussie dollar declined further below its H4-period EMA60 support. Look for confirmation signals of a downtrend, with downside targets at 0.7875 and 0.7817 in the short term.
（AUD/USD H4 chart）
As to precious metals, gold is rebounding and correcting its flash crash seen at 2300 GMT (0700 BJT Thursday). Gold formed a double top pattern as lack of upside momentum after staging a rally and moving temporarily towards a weekly high this week on its 4 hour chart following the release of ADP report. Its long term moving averages maintained bullish bias in the state of diverging for now although the price broke below its EMA60 due to the flash crash. Wait and see if its short term moving averages could move downwards and go into the scope of its long term moving averages.
（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.