The dollar index falls while waiting for employment data

May 07, 2021 15:30

As with every first Friday of the month, in today's session we will know the employment data of the United States known as NFP. Non-farm payrolls measure the change in the number of people employed in the last month where a better than expected data is usually positive for the US dollar.

In today's data, we will discover the job creation statistics in the United States corresponding to last April, where the US economy is expected to have generated 978,000 new jobs, thus exceeding the 916,000 jobs generated during the year. Once again, March is indicative of an improvement in the labour sector and the country's economy.

It is expected that this data may be better than predicted by the market consensus, as for the first time this week, and since the pandemic began, the initial requests for unemployment benefits have been less than 500,000 people. Consequently, it is possible to conclude that there is a strong boost in job creation, thanks to the improvement of the pandemic, following a high rate of vaccination.

At the moment and during the day today, the dollar index is registering decreases, pending the publication of this data, thus continuing with the decreases that began last Wednesday that have caused a weekly decrease in this index close to 0.5%.

If we look at the daily chart, we can see how, after the price, it has not been able to outperform its 18-session average after the last bullish momentum and after bouncing off its medium-term uptrend line. The loss of this trend line would open the doors for a further correction to the important support level of $90.00. On the contrary, positive unemployment data could give a new impulse to the price, although as long as it does not exceed its current resistance level, we cannot expect a further range.

Source: Admiral Markets MetaTrader 5. Daily chart of the dollar index. Data range: from January 3, 2020 to May 7, 2021. Prepared May 7, 2021 at 12:55 CEST. Keep in mind that past returns do not guarantee future returns.

Price evolution in the last 5 years:

  • 2020: -6.42%
  • 2019: 0.34%
  • 2018: 4.26%
  • 2017: -10.22%
  • 2016: 3.59%

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