The focus is squarely on this Friday’s Non-farm Payrolls for indication of just how quickly the Fed might be looking to start tapering asset purchases. As Jerome Powell said last Friday, the economy has met the marker for ‘significant further progress’ in terms of ; but in terms of employment, the economy isn’t quite there yet according to the head of the FOMC, and this puts even more focus on jobs numbers. This Friday’s NFP report is the last such report that the Fed will get to see before the September rate decision, which is a quarterly rate decision as the bank will also be furnishing updated guidance and projections. The wide thought is that if the bank is, in fact, looking to taper asset purchases by the end of 2021, that September rate decision will likely be important for the FOMC telling us when and how they’re planning on doing it. If Friday’s jobs report falls flat, there’s even more motive for the Fed to stay loose and passive, kicking the can on taper into 2022 and this could lead to some aggressive USD-weakness. At this point, the US Dollar is holding on to a short-term while the longer-term trend does retain some element of bullishness, looking back to the June/July lows that remain about 3% away.
The current USD setup is showing resistance at a prior spot of support, taken from around 92.80-92.90. A bit lower is another big spot of resistance and this is the same spot that caught the mid-August swing-low, and that’s around 92.45 with a couple of different Fibonacci levels.
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