US dollar falls, gold rally continues and US NFP on the horizon | Top Vip News

US Dollar Analysis, Price and Chart

• Fed Chair Powell remains positive but depends on data.
• The US Dollar Index falls and now looks to Friday’s NFP report for guidance.
• Gold hits a new record.

Fed Chair Jerome Powell gave the market little to work with in the first of his two semi-annual testimonies on Wednesday except to reiterate that interest rates are likely to fall later this year if economic data allows. Chairman Powell told the House that rate cuts “will likely be appropriate” later this year… “if the economy broadly performs as expected,” and that inflation is expected to continue falling in the future. . The second day of Powell’s testimony begins today at 3pm UK time and is not expected to provide further information on the future path of US interest rates.

A more likely driver of US dollar volatility will be Friday’s monthly US Employment Report (NFP), which hits screens at 1.30pm in the UK. Another 200,000 new jobs are expected to be announced, well below last month’s 353,000, while the unemployment rate remains stable at 3.7%.

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The US dollar fell following Chairman Powell’s testimony yesterday and remains on the defensive in early European trades. The rate-sensitive US 2-year bond yield continues to decline after hitting a recent high of 4.76% on February 23 and could soon hit 4.50%. The 200-day simple move is acting as resistance for now and is likely to keep returns capped.

Two-Year US Treasury Yield Daily Chart

The US Dollar Index opened below the three simple moving averages today for the first time since early January, highlighting the dollar’s ongoing weakness. A fresh sell-off would target 103.00 before the 61.8% Fibonacci retracement level at 102.49 comes into focus. The CCI indicator shows the US dollar in strongly oversold territory.

US Dollar Index Daily Chart

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One of the beneficiaries of the US dollar’s recent weakness is gold, as the precious metal posted a new all-time high today. Gold is up almost 9% from the February 14 low and looks set to rise in the coming weeks, although a heavily overbought CCI reading could see the precious metal consolidate its recent gains before moving forward.

Daily Gold Price Chart

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IG Retail trader data shows that 43.06% of traders are net long with the ratio of short to long traders at 1.32 to 1. The number of net long traders is 7.09% smaller than yesterday and 15.59% less than last weekwhile the number of net short traders is 2.11% higher than yesterday and 48.39% more than last week.

We normally take a view contrary to the sentiment of the crowd, and The fact that traders are short suggests that gold prices may continue to rise.

What is your opinion about the US dollar and gold – Bullish or bearish? You can let us know via the form at the end of this article or you can contact the author via Twitter. @nickcawley1.