It’s always interesting to check in on the primary currency indices ahead of any major release and even more so when it is Non Farm Payroll and starting with the daily chart for the US dollar index. And it has been no surprise that the US dollar continues to maintain its bullish momentum with both the technical and fundamental forces driving driving the currency of first reserve in unison. Over the last few weeks we have seen and heard an ever-increasing number of FED members, (both voting and non voting) talking up the dollar and confirming the hawkish tone which now seems to be everywhere. Indeed later today we have Bostic, Dudley and Kaplan all adding their own voice to the growing cacophony of sound, and rhetoric for future hikes to maintain economic growth and stability. From a technical perspective this week’s price action has seen the dollar move firmly through resistance at 11,960, and as a result now provides a strong platform of support moving higher.
This morning’s price action has seen further gains for the dollar which is currently trading at the 12019 region at time of writing. Should NFP data deliver a better than expected number then 12,100 looks to be the next target area of a possible pause in the move higher. Even if NFP is weaker than expected, the technical support now in place, and with the hawkish tone rising, even this is unlikely to put a halt to the longer term trend higher and into the end of the year.
By Anna Coulling