On the back of yet another strong NFP figure, the Dollar surged higher late last week and the important psychological level of 100 is now in sight, seen last in 2003. This latest solid employment print is a sign that a Fed lift-off is approaching quickly and has fuelled market expectations of a June rate-hike. The Fed meeting on March 18th is now of prime importance and traders will be eagerly observing to see if the term “patient” is dropped from the Fed’s language.
On the data front we have Avance Retail Sales on Thursday and U. Of Michigan Confidence on Friday with both sets largely expect to support the Dollar. Whilst we may likely see a pause and consolidation at these levels ahead of the March 18th meeting, It’s unlikely that we will see a correction lower. Though we have seen USD-long squaring, the profit taking seen on this latest Dollar Drive isn’t as strong as usual, indicating that markets are under-positioned currently, creating plenty of scope for the next phase of action.
This move has pushed both EURUSD and USDJPY into very interesting levels.
EURUSD is now trading lows of mid 1.08 (last seen in ’03) and is currently positioned very precariously on a long term trend line from 2000 lows.
USDJPY has broken to the upside through it’s triangle consolidation and is now just shy of the local 121.83 high. Beyond that level the next resistance sits at 124.15, the high from 2007.
I am closely monitoring OrderFlow & price action in both pairs to set positions so stay tuned in to the Morning Report for my daily analysis.