- The dollar inched lower although the headline number of NFP came in better than expected at 228,000 jobs added in November while the unemployment rate remained steady as the previous reading.
- As to non-U.S. currencies, they traded mixed with the euro rebounding, the sterling closing lower while the Aussie dollar whipsawing around its lows. The busy week will feature decisions from four major central banks and key economic macro data releases, including inflation and retail sales data from U.S.
The dollar staged a corrective decline voluntarily despite the solid NFP data on Friday 8 December. U.S. released its jobs report for November last Friday night which came in better than expected at 228,000 jobs added while the unemployment rate remained steady as the previous reading. However, wage growth in the form of average hourly earnings rising by 2.5% for the year was worse than expected. The dollar held its uptrend steadily although traders pushed to take profits on the release of NFP after the currency saw significant gains last week. The currency could potentially go back to circa 94.5 after a bullish closing on the week amid the expectations of imminent rates hiking by FOMC in December.
The dollar index (DXY) inched lower after reaching a high of 94s. Its short term moving averages turned lower though with shallow retracement while its bullish long term moving averages remained steady in a state of divergence which could offer modestly strong support to the price action of the index on the 1 hour chart. Look for a intertwining between the short term moving averages and long term moving averages.
（DXY H1 chart）
As to non-U.S. currencies, the euro rebounded to challenge its H1-period EMA60. A failure to clear the resistance decisively then the shared currency could resume its downtrend. Given that the British pound declined and closed lower on the weekly chart Friday after giving up gains of Thursday, it will interesting to watch whether or not the sterling could fall further on the week. The Aussie dollar materialized its short term rally early this morning after the commodity currency whipsawed around its lows, keeping an eye on its strength and magnitude of the short-term rally.
（AUDUSD H4 chart）
Switching gears to precious metals now, the gold traded sideways after correcting last week’s significantly accumulated losses. Its short term moving averages flattened after convergence below its long term moving averages which offered resistances as they remained bearish and divergent on the 1 hour chart. Whether or not the yellow metal could extend declines after consolidation could be interesting to observe.
（Gold H1 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.