Image source: Ravil Sayfullin © 123RF.com
The NFP report was released earlier today showcasing an only 20 000 new added jobs to the American economy, which is a huge misstep compared to the 180 000 estimated in the market forecast.
Even though the results disappointed investors the initial aftermath of the data was contained within the defined range of the US dollar index, you can find more information on that in our previous market recap right here.
As you can see, in our previous article we have outlined a range of the US dollar index with boundaries between 97.70 and 95.60 and here is how the market reacted to Friday’s jobs data:
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Thursday's session had actually closed at 97.60, just below the range’s upper boundary, in anticipation of the jobs report. A highlight of next week’s trading session would be to see whether the NFP’s negative data has the potential to sustain a bearish correction or the bulls would exercise enough pressure, on the presumption that the price action following the NFP has already been priced in, and try to push through the range's upper boundary.
On the previous NFP report from the 1st of February, the circumstances on the market were exactly the opposite, with the price trading near the lower boundary of the range, but the NFP data actually surpassed the forecast of 165000 and beat the estimation with 304000 new added jobs to the US economy.
Consequently, the market reacted positively to the data and the dollar index jumped from 95.60 to 97.20 in eight trading days. If this turns out to be a pretext for what is to come, and the bears manage to take control, then we can expect to see a corrective downswing in next week’s trading session. Otherwise, the bulls are likely to test the strength of the resistance level at 97.70.
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