Jobs Data Marked Near-term Trend Changes In Jan And Feb; What About Now?

Dollar Index:  The Dollar Index rose about 1.15% last week.  It was the best performance since before the US election and vaccine was announced.  It pushed above 92.00 before the better than expected jobs report and after stalled near 92.20.  The momentum indicators allow more gains, but the dollar's rally that many are just discovering actually began in early January from around 89.20.  That is to say, the dollar upside correction seems mature.  In fact, the (61.8%) retracement of its losses since the election is found around 92.35.  We had suggested something a bit higher as possible and anticipate a test on the 93.75-93.00, which houses the 200-day moving average (UUP).  

Euro:   With the pre-weekend sell-off, the euro completed the (61.8%) retracement of the rally since the election found near $1.1880.  We had projected that the topping pattern we saw would allow the euro to fall to $1.1750, which at the time was below the 200-day moving average (now ~$1.1820). The momentum indicators are headed lower, but the trend lower has been in place since early January.  Some consolidation looks necessary to preserve the orderly decline.  It spent most of the pre-weekend session below the lower Bollinger Band (~$1.1970).  Three-month implied eased a little last week, which is what one might expect if the euro's decline is seen as corrective in nature (FXE).  

Japanese Yen:  The dollar rose by over 1.5% against the yen last week.  It was the third weekly advance for a little more than 3%. For the past eight sessions, the dollar has risen above the previous session's high. It briefly traded above JPY108.60 for the first time since the middle of last year. The momentum indicators are stretched, and the greenback is finished above the upper Bollinger Band (~JPY108).  The dollar's ascent has been so strong that initial chart support is not seen until JPY107.60 (FXY).  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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