For the first week of the month, we traders will always be focusing on the US Dollar (USD) simply because we have one of the most important news event on the first Friday of the month – the Non-Farm Payroll (NFP).
This economic data measures the change in the number of employed people during the previous month, excluding the farming industry.
It is one of the most important news event in the Forex market because job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.
If the data released on Friday is significantly better than the expected numbers, it will indicate an improvement in the economy, which usually cause the strengthening of the US Dollar. On the other hand, if the data released is significantly worse than the expected numbers, it will indicate that the economy is slowing down, which usually translate to the US Dollar to weaken.
Based on our analysis on the US Dollar Index (DXY), we see limited upside on the US Dollar, and we are expecting more downside potential trading out of this risk event.
Since the start of 2017, the US Dollar has been falling from the high at 103.84 to the recent low in September at 91.01.
The fall in US Dollar seems to have completed a larger degree 3rd wave, and is now in a 4th wave correction towards 94.05 to 95.91 area.
According to Elliott Wave Principle, a complete cycle comprises a 5-wave structure, followed by a 3-wave structure.
Thus we are still expecting one last wave down (5th wave) to complete the overall cycle on the US Dollar.
This Friday’s NFP data will provide us the more ‘clues’ as to where the US Dollar will likely be heading for the remaining of 2017.
This economic data measures the change in the number of employed people during the previous month, excluding the farming industry.
It is one of the most important news event in the Forex market because job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.
If the data released on Friday is significantly better than the expected numbers, it will indicate an improvement in the economy, which usually cause the strengthening of the US Dollar. On the other hand, if the data released is significantly worse than the expected numbers, it will indicate that the economy is slowing down, which usually translate to the US Dollar to weaken.
Based on our analysis on the US Dollar Index (DXY), we see limited upside on the US Dollar, and we are expecting more downside potential trading out of this risk event.
Since the start of 2017, the US Dollar has been falling from the high at 103.84 to the recent low in September at 91.01.
The fall in US Dollar seems to have completed a larger degree 3rd wave, and is now in a 4th wave correction towards 94.05 to 95.91 area.
According to Elliott Wave Principle, a complete cycle comprises a 5-wave structure, followed by a 3-wave structure.
Thus we are still expecting one last wave down (5th wave) to complete the overall cycle on the US Dollar.
This Friday’s NFP data will provide us the more ‘clues’ as to where the US Dollar will likely be heading for the remaining of 2017.