US Dollar on Tenterhooks Ahead of US Jobs Data; Setups on GBP/USD, EUR/USD

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This article provides an in-depth examination of the U.S. dollar's fundamental and technical outlook, considering various scenarios that could unfold after the April U.S. jobs report is released.

A noteworthy development was the Fed's decision to significantly taper the pace of its quantitative tightening program. Beginning in June, the monthly amount of maturing Treasuries allowed to roll off the balance sheet will be cut from $60 billion to a mere $25 billion. This move caught many bond dealers off guard, as most anticipated a smaller reduction.

A weaker-than-expected nonfarm payrolls report could shift the narrative again, prompting traders to start discounting more monetary easing for 2024, creating a hostile environment for the U.S. dollar. On the other hand, hotter-than-forecast jobmight force markets to price in a scenario of higher interest rates for longer – a bullish outcome for the greenback.trended lower on Thursday after an unsuccessful attempt to clear the resistance at 1.0725, with prices moving back towards the 1.

On the other hand, if buyers make a new appearance and propel prices higher, resistance emerges at 1.2550, where the 200-day simple moving average converges with a short-term descending trendline. Moving further up, attention will be focused on Fibonacci resistance at 1.2590, followed by 1.2620.Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors.

 

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