Investors and other market participants have already noticed that the US Dollar has been actively growing steadily against other major currencies for 11 weeks so far. According to Deutsche Bank, this is the first time in history. On Friday, September 26th, the USD index closed at the highest price level since 2010 close to 85,69. As of Monday, September 29th, the index managed to set another high at 85.80.
It seems like traders and investors are getting increasingly interested in the US Dollar again. Most market participants are currently focused on central banks’ actions. Despite the fact, that the Fed is still tapering QE3 (it is still not over) amid ultra-low interest rates, the US Dollar keeps on gaining value against other currencies.
This week’s key news as major market drivers for USD 5
The employment report for August indicated an increase of only 142 000 jobs, thereby contradicting most key economic reports from the USA. This time, experts anticipate much stronger figures shown by Non-Farm Payrolls – some 215 000 new jobs. The expected increase seems to be confirming the Fed’s prediction on the recovery in the US labor market. The new Non-Farm Payrolls report is expected to come out on October 3rd.
The improvement of of the revised August Non-Farm Payrolls report could smoothen the disappointment in the previous report. Over the last 3 years, the revised report has been improving by 42 000 on average. Still, this time, the focus is on earnings change. Another increase will back the supposition that the US economy is growing (by 3% on average by Q3 2014).
At the same time, car sales are expected to drop in September. August’s sales indicated 17,4 million new car sales. Thi time, the sales are expected to slow down.
The Fed’s major inflation index was released on September 29th. Prior to the report, the rate of inflation was still under the target of 2,0%. The target indicates a healthy economy.
At the same time, external trade figures may trigger changes in GDP forecasts for Q3 2014. Economists assume that the real GDP is going to show a 3% increase in Q3 2014. An increase in the net export seems to be contributing to that.
USD Index Prospects
According to Masterforex-V Academy, a true expert in everything that concerns trading in financial markets, reports that the index gained more than 0,06% during yesterday’s European trading session.
Then, the index retraced from the local high of 85,80, as shown by the H1 chart. The retracement took place on increased trading volume, thereby touching the level of support represented by MA 21. A break below 85,58 may give way to 85,37 and 85,09.
At the same time, a break above the local high of 85,80 may trigger a further rally up to 86,00.
