Members login
Currencies Update: Dollar rebounds before NFP report
Written by article default Friday, 05 November 2010 09:55
The US dollar rebounded after three days of decline against majors on expectation that the non-farm payrolls will show 60,000 added jobs in October from the prior 95,000 drop in September.This week, the dollar remained under pressure before and after the Fed's rate decision which involved pumping $100.0 billion per month till June 2011 while keeping borrowing cost near zero to energize the economy.
Perhaps the stimulus that was above the projected $500.0 billion raised concerns about the health of the economy, thereby driving the dollar to the downside.
Yet, today the greenback rebounded before the announcement of the awaited NFP report as depicted by the dollar index, a six-currency gauge that tracks dollar movements, which rose to a high of 76.41 compared with the day's opening at 75.85, where momentum indicators are giving bullish signs on the daily charts.
Concerning the euro-dollar pair, it pared some of the gains generated in the previous three sessions yet remains above 1.41 which provides support to the pair.
Today, German factory orders fell sharply in September to 14.0% from the revised 20.4%, below estimates of 19.0%, giving another cue to the euro.
Meanwhile, the pair is trading at 1.4117 after reaching a high of 1.4248 and a low of 1.4080, whereas the trading range for today is among the key support at 1.4020 and the key resistance at 1.4470.
Moving to the royal pair, it slipped on the daily basis after yesterday's spike to move in an overbought area as depicted by the stochastic oscillator momentum indicator.
The data released today showed producer prices soared to the highest level in six-months, which underscored concerns with regards to inflation that is currently above the BoE's upper-limit of 3.0%.
The pair is currently trading at 1.6246 after touching a high of 1.6293 and a low of 1.6164, while the trading range for today is among the key support at 1.6100 and the key resistance at 1.6450.
With regard to the dollar-yen pair, it slightly rebounded on the daily scale to reach a high of 80.99 after the BoJ tracked the Fed through announcing another round of stimulus to prevent recovery from losing momentum.
Currently, the pair is trading at 80.86, while the trading range for today is among the key support at 78.40 and the key resistance at 82.30.