NFP as an excuse for rebounding from the upper border on the $

The dollar again approached the upper border of its medium-term range 93.30-95.40. As reasons for this, you can call both an excellent form of the US economy and summer range trading, when assets are circulating from the top to the bottom. As a rule, as a reason for a rebound from the boundaries of the range, one or another fundamental factor is chosen.

In this regard, Friday is almost ideal for rebounding the dollar from the upper boundary of the medium-range.

Speech, of course, is about statistics on the US labor market. Recall, traditionally the US labor market statistics unit includes the following indicators (see the table below).

Pre-Forecast

15:30 USA 3 NFP (July) 213K 190K
15:30 USA 3 Average hourly earnings (m / m) (July) 0.2 % 0.3 %
15:30 USA 3 Unemployment rate (July) 4.0 % 3.9 %

In general, the forecasts are good, but the markets by and large need only an excuse. They can also quarrel with the insufficiently rapid growth of wages, as a reason for doubts that the Fed will raise rates, and to the number of new jobs, even if it comes within the forecasts (since the current forecast is lower than the previous value). In addition, the last time unpleasantly surprised by the unemployment rate, which has grown. Plus, the results for the previous period may be revised downward. That is, if you want to find an excuse, you will find an excuse.

It is in this we see the vulnerability of the dollar on Friday. Technically, he is ready for a turn and a local decline, and a fundamental reason for this will be found at 15-30, if, of course, they want. Do not exclude the possibility of weak data. The fact is that over the past two years, data on the NFP has never been published 3 times in a row better than forecasts. Maximum - two times in a row. And this was recorded just last month. That is, purely statistical data this week should go worse than forecasts.

In total, we believe that the dollar is unlikely to be able to overcome the upper limit of the range, but the rebound from it is the most likely development of events, especially considering that there is still a whole month of summer ahead. Therefore, our recommendation - the sale of the dollar in the upper range.