Today, on May 2nd, the US Dollar has already lost 0,43% of its value against a basket of 6 other major currencies. This came as the result of a better-than-expected report on the US Non-Farm Employment report. At this point, the USD index is trading within the scope of the 78,85-79,90 price range.
Most probably, the positive figures triggered a rebound followed a rally in the market of the US Dollar index. Indeed, the Non-Farm Payrolls came out much better than expected, which came as a real surprise. The report provides key economic figures, which indicate the real state of affairs in the US economy. These figures are also very important when it comes to defining the near-term prospects of the American currency. The Fed also takes these data into account when making its interest rate decisions.
It is not a secret that the US economy is fairly dependant on domestic consumer spending. In fact, consumption accounts for more than 70% of the US economy, which is the highest share among all other economies.
Today's data indicated an increase up to 288 000 while most experts had anticipated 210-260K. At the same time, the level of unemployment in the USA declined from 6,7% down to 6,3% in April 2014. Analysts had anticipated 6,6%. At the same time, the amount of new jobs in March was upgraded from 192 000 up to 203 000. The average working week remained at 34,5 hours. The average hourly earnings also remained unchanged at $24,31.
Market Reaction
The currency market reacted accordingly. The US Dollar gained some value against other majors amid better-than-expected employment data. At the same time, gold lost a bit of its value since gold has negative correlation with the American currency.
Mid-Term Prospects
According to the comprehensive analysis of the USD index made by Masterforex-V Academy experts, the H4 chart of the index indicates that the price is currently fluctuating within the scope of the 79,48-80,06 timeframe. The top and bottom of the range are market with blue lines.
The preceding low at 79,39 (matching the MF pivot) wasn't broken. The price has been rallying since yesterday. The movement started at 79,48, which is a local low. If the USD index keeps rallying, we are likely to see the price touching 80,06. If it succeeds in breaking and consolidating above the level, the next target will be around 80,34. On top of that, thi will trigger a mid-term bullish tendency. This scenario is represented by the green arrow.
Alternatively, the price may fail to gain value and decline down to 79,48. If the level is broken, the next level to test is 79,39 and 79,27. This scenario is represented by the blue arrow.
