USD NFP: Will Strong Data Push Dollar to New Highs?
The US Dollar (USD) is poised for a potentially significant move as it enters the September Nonfarm Payrolls (NFP) release. According to recent FXStreet analyses, opinions are split on whether the USD will break resistance or break the rally.
Two analysts, Frank Walbaum and ING's Global Economics Team, see the Dollar staying bid into the NFP report with an upside breakout on the table. Walbaum notes that the USD is approaching a key resistance area near 101.50 and expects a stronger-than-expected reading to push the USD significantly higher.
ING anchors the US Dollar's strength in the activity side of the US economy, citing the Fed's hawkish stance. Its analysts expect DXY 'to remain bid in a 101.50-101.80 range today, but an upside breakout is a possibility should tomorrow's US data surprise on the upside.'
On the other hand, Matthew Ryan and Alexander Kuptsikevich argue that the rally has gone too far. Ryan warns that 'the move has perhaps gone a little bit too far,' while Kuptsikevich documents a market already pulling back as October-hike odds slide from 72% to 45%. However, he stops short of turning bearish, suggesting that strong US labour market data could shift the balance back towards the hawks.