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DXY sits above 23.6% Fibo, NFP could beat estimates

TVC:DXY   US DOLLAR CURRENCY INDEX
Dollar index             is back above 23.6% Fibo of Apr 2008 low-Dec 2015 rally.

  • The hourly chart shows a breach of minor rising trend line, but also note a possible bullish crossover between 50-MA and 200-MA on hourly.

But remember, we have non-farm payrolls due for release along with wage growth figures. Dollar revival would require scenario 1 as discussed here

Lets have a look at what lead indicators say with regards to NFP

Points in favor of strong NFP

  • ISM non-manufacturing employment index clocked a 4-month high in April
  • Four-week moving average of jobless claims stay near multi-decade low
  • Continuing claims dropped to 16-year low
  • ISM manufacturing employment index hit 4-month high as well

Points in favor of weak NFP

  • ADP private sector job additions slowed to 156K from 194K.

CommentsADP was a shocker, but ISM non-manufacturing is a much strong lead indicator for NFP. Hence, we may see actual figure beat estimated figure of 200K.

However, dollar bulls need strong wage price inflation.

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