Dollar steady ahead of US non-farm payrolls, Gold flat
The story defining the Greenback’s aggressive appreciation in recent days revolves around robust economic data propelling U.S. Treasury yields to multi-year highs.
Dollar strength was a major market theme this week as growing optimism over the strength of the U.S. economy boosted buying sentiment towards the currency. Although the rally took a breather Friday morning ahead of the U.S. jobs data later in the day, bulls remain in firm control. With the ADP figures exceeding market expectations, there is speculation over the U.S. non-farm payrolls following a similar pattern. A blockbuster NFP number complemented with signs of accelerating wage growth could stimulate expectations over the Fed adopting a more aggressive approach towards monetary policy normalisation.
Focusing on the technical picture, the Dollar Index remains in an uptrend on the daily charts. A solid weekly close above the 96.00 level could instil bulls with enough courage to challenge 96.43. Alternatively, sustained weakness under 96.00 may trigger a correction back towards 95.30. trading week for the Pound thanks to Brexitrelated uncertainty and political drama in Westminster.
a slight boost Friday morning on reports of Ireland backing Theresa May’s Brexit plan, it may be too early to celebrate. Lessons of the past have repeatedly taught investors how highly unpredictable the world of Brexit can be. With Brexit fears clearly a major theme weighing on sentiment, the near-term outlook for the British Pound points to further downside. Focusing on the technical picture, the GBPUSD has staged a rebound towards the 1.3050 resistance level. A failure for bulls to secure a weekly close above this region could result in the GBPUSD sinking back towards 1.2930.