Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The US Dollar Index retreated, putting the 103.00 support to the test, dropping back below the important 200-day SMA. On Friday, all eyes will be on January’s nonfarm payrolls, the unemployment rate, factory orders, and the final print of Michigan Consumer Sentiment.
Renewed selling pressure in the dollar, combined with more weakness in US rates, fueled the second straight daily decline in USD/JPY, this time threatening the 146.00 support level.
The Dow Jones Industrial Average (DJIA) climbed 0.97% to end Thursday at $38,519.84, while the NASDAQ Composite gained 197.63 points to end up 1.3% at $15,361.64.
US equity indexes rose on Thursday after Fed Chair Jerome Powell’s hawkish stance on inflation. Powell warned that the Fed needs to see inflation hit its key 2% target and provide evidence that it will remain there after rate cuts resume.
The Fed also has a dual mandate to stabilize the US labour market, as a destabilizing labour market could force the Fed to cut rates to stimulate the US domestic economy.
Economic Data
The US ISM Manufacturing Purchasing Managers’ Index (PMI) reached a three-and-a-half-year high of 49.1 in January, climbing over the forecast decline to 47.0 from December’s 47.1. US Initial Jobless Claims rose to 224K for the week ended January 26, giving rate cut betters a step up on hope.
The key data print for this week is Friday’s US Nonfarm Payrolls (NFP), with January’s headline labour print expected to be 180K versus December’s 216K.
Key Developments
On the basis of the dollar’s poor performance, EUR/USD regained balance and rebounded from multi-week lows near 1.0780, which was further backed by the provisional 100-day SMA. The sole notable release on Friday will be the ECB’s Survey of Professional Forecasters.
GBP/USD surged and recaptured the 1.2700 level and beyond as the BoE kept its policy rate steady, with investors expecting the central bank to begin lowering rates in Q3 2024.
AUD/USD fought off some of the weekly bearishness and hit the 0.6580 level after meeting initial resistance near 0.6500 in early activity. In Australia, home loans and investment lending for homes are due on Friday.
Crude oil prices continued to fall and fell below $74.00 per barrel, testing the transitory 55-day SMA.
Gold prices maintained advance to fresh highs above $2060 earlier on Thursday, and eventually settled around $2055.50 per ounce, while silver ended two straight sessions of losses after recovering from the $22.50 level.
Also Read:
What could January’s NFP Data bring about in financial markets?
Middle East talks drag WTI lower after early surge on supply concerns
Canadian dollar eases ahead of NFP data
Wall Street struggles to recover from post FOMC sell-off
EUR/GBP modestly surges following BoE’s decision, Eurozone inflation data
US dollar struggles to recover gains despite upbeat ISM numbers
