Market Analysis: US Dollar Falls after Weak Employment Data

FXOpen

The US dollar fell after data showed the world's largest economy created fewer jobs than expected last month, raising expectations that the Federal Reserve is likely to keep interest rates steady again at its December meeting. Nonfarm payrolls increased by 150,000 jobs last month, the data showed. Figures for September were revised down to show 297,000 jobs created instead of 336,000 as previously reported. The US dollar index, a measure of the greenback's exchange rate against six major currencies, fell 0.8% to 105.29. Investors also paid attention to the decline in business activity: the indicator in the services sector from S&P Global in October adjusted from 50.9 points to 50.6 points, while analysts did not expect changes, and the index from the Institute for Supply Management (ISM) — from 53. 6 points to 51.8 points, which also turned out to be worse than the expected 53.0 points.

EUR/USD

The EUR/USD pair is showing slight growth, developing the bullish momentum formed at the end of last week. The instrument is testing the 1.0735 mark for an upward breakout, updating local highs from September 14. The immediate resistance can be seen at 1.0758, a breakout to the upside could trigger a rise towards 1.0798. On the downside, immediate support is seen at 1.0703, a break below could take the pair towards 1.0596.

Investors are focusing on the October US labour market report, published on Friday. In turn, export volumes from Germany lost 2.4% in September after growing by 0.1% in the previous month, while experts expected -1.1%, and imports fell by 1.7% after -0 .3% with a forecast of 0.5%. Thus, Germany's trade surplus in September decreased from 17.7 billion euros to 16.5 billion euros, with expectations at 16.3 billion euros.

At the highs of the week, a new ascending channel has formed. Now the price has moved away from the upper border of the channel and may continue to decline.

GBP/USD

The GBP/USD pair is developing mixed dynamics, consolidating near the local highs of September 20, updated the day before. The instrument is again testing the 1.2370 mark for an upward breakout. %. The nearest resistance can be seen at 1.2230, a breakout to the upside could trigger a rise to 1.2277. In the fall, the nearest support is seen at 1.2192, a break below could take the pair to 1.2165.

The Bank of England last week published updated forecasts according to which the British economy is approaching a recession and will only be able to show near-zero growth in the coming years. This week, investors will be assessing UK gross domestic product (GDP) data for September and the third quarter: forecasts suggest the national economy will contract by 0.1% in the quarter after growing by 0.2% in the previous period, and In annual terms, a slowdown is expected from 0.6% to 0.5.

The ascending channel is maintained. Now the price has moved away from the upper border of the channel and may continue to move towards the lower border.

USD/JPY

The USD/JPY pair is showing slight growth, correcting after a noticeable decline last week, as a result of which the instrument again dropped below the psychological level of 150.00. Strong resistance can be seen at 150.09, a break higher could trigger a rise towards 150.43. On the downside, immediate support is seen at 150.16. A break below could take the pair towards 148.57.

The yen was slightly supported by optimism from statistics from Japan: the manufacturing business activity index from Jibun Bank rose from 51.1 points to 51.6 points in October, while analysts did not expect any changes. Today, the dynamics of the instrument may be insignificant due to the lack of macroeconomic publications from Japan and the USA.

At the highs of the week, a new downward channel has formed. Now the price is approaching the channel border and may continue to rise if it breaks through.

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

AUD/JPY Analysis: Rate Falls to Important Support EUR/USD, GBP/USD, USD/JPY Analysis: Dollar Stable Despite Weak Employment Data Will rate hikes end when 2023 ends? USD/JPY, USD/CAD, and EUR/USD Analysis: The US Dollar Corrected in Anticipation of PMI Data Release EUR/USD, GBP/USD, USD/JPY Analysis: US Dollar Weakens after Fed Chairman's Comments

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: AUD/JPY, RATE HIKES, S&P 500, WTI Oil

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. AUD/JPY: Rate Falls

Trader’s Tools

Fixed Exchange Rates: Benefits and Limitations

Fixed exchange rates, a cornerstone of international finance, play a pivotal role in shaping global commerce and investment landscapes. This article delves into their intricacies, exploring the historical evolution, practical understanding, and the balance of benefits and challenges they present.

Trader’s Tools

Alternative Investment Options

Traders and investors are increasingly turning to alternative investment options to diversify their portfolios and seek new avenues for potential returns. In this FXOpen article, we discuss alternative investments, examining the types and explaining the reasons why they are gaining

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.