Trusted by over 15 Million Traders
The Most Awarded Broker
for a Reason
CATEGORIES
market news
ADP is on the verge of ending, and the dollar is waiting for the verdict above the 100 mark?
Wonderful introduction:
Let me worry about the endless thoughts, tossing and turning, looking at the moon. The full moon hangs high, scattering bright lights all over the ground. www.xmaccount.come to think of it, the bright moon will be ruthless, thousands of years of wind and frost will be gone, and passion will grow old easily. If you have love, you should grow old with the wind. Knowing that the moon is ruthless, why do you always place your love on the bright moon?
Hello everyone, today XM Forex will bring you "[XM official website]: ADP has made a final decision, is the US dollar waiting for the verdict above the 100 mark?". Hope this helps you! The original content is as follows:
On Wednesday (November 5), the U.S. dollar index traded above 100.10 during the European session, with little fluctuation. The disk shows that the rising channel since September is still playing a leading role, and the price is still close to the previous high of 100.2200. Today’s focus is on the repricing of employment data and interest rate expectations: once employment clues strengthen the narrative differentiation of “tight inflation, weak employment”, the dollar may choose a direction along the channel.
Fundamentals
The main axis of recent macro clues is "weakening employment - policy trade-offs - re-anchoring of interest rate expectations." Tonight at 21:15, Automatic Data Processing (ADP) will announce the changes in private sector employment in October. The market consensus is that there will be an increase of 24,000 people. The previous value was a net decrease of 32,000 people in September. The preliminary estimate previously given by the ADP Research Institute shows that during the four-week period to October 11, the average increase in net employment was about 14,250 people. If the reading in October is realized as 24,000 people, this will provide a certain hedge against the negative growth in September, but it will still be significantly lower than the long-term average of about 150,000 people per month in the past 15 years, structurally strengthening the direction of "cooling of the labor market."
What is more difficult is the availability of data: the government shutdown has entered its fifth week, which is very likely to lead to the temporary absence of JOLTS job vacancies and non-farm payrolls (NFP) this week. In the short term, the market and the Federal Reserve will rely more on alternative and high-frequency indicators to judge the employment boom. In other words, the marginal impact of the ADP reading is amplified. It is no longer just a "preview", but an "anchor" that directly affects the interest rate path and dollar transactions under data gaps.
In terms of policy, the Federal ReserveHaving already cut interest rates by 25 basis points on October 29, there are clear differences within the www.xmaccount.committee on the follow-up pace: one group is concerned about weak employment and lack of growth potential, and advocates continued policy support; the other group emphasizes the resilience of inflation and the risk of a second rise, and is more worried about "excessive easing." This difference is also reflected in interest rate pricing - the probability of another 25 basis point interest rate cut in December has dropped from "more than 90%" last week to "64%". This reduction is an important catalyst for the recent phased strength of the US dollar.
If ADP is higher than expected, market concerns about the employment outlook may be suspended, and the focus of trading will return to the linkage of "inflation-nominal interest rates". The Fed's hawkish statement will be endorsed, and the U.S. dollar index may once again test the upper edge of the channel and seek a breakthrough. On the contrary, if there is a "second disappointment" that is significantly lower than expected or even continues to have negative growth, the interest rate path will tilt towards faster easing, and the downward shift of the yield curve will weaken the relative interest rate advantage of the US dollar. The US dollar index may fall back from the upper edge and move to a high level within the channel.
In terms of time, ADP data will be released at 21:15 tonight. The data window period and the intensified divergence have made today’s “second-order effect”—that is, the repricing of bets on the December meeting—will be directly mapped to the daily trend of the U.S. dollar index.
Technical aspect:
The daily chart shows that the U.S. dollar index has steadily risen along the ascending channel. The lower track of the channel has moved upward from the low point of 96.2109. Periodic highs have been formed at 98.6330, 99.5549 and 100.2200. The structure is www.xmaccount.complete and the slope is balanced. The current price is close to the upper edge of 100.2200, which is a "strong consolidation near resistance." Among the MACD indicators, DIFF is 0.4513, DEA is 0.3368, and the histogram is 0.2291 and showing an expansion trend, indicating that the trend momentum is still accumulating; the RSI (14) reading is about 68.6858, approaching the overbought threshold of 70, indicating that the upward trend is accompanied by short-term overheating.
As far as price is concerned, if it effectively breaks through 100.2200, the top may continue to challenge the 100.70 area; if it fails to break through and there is a long upper shadow or heavy volume stagflation, it is easy to retrace to the central axis of the test channel around 99.50. For further support, focus on the horizontal intensive area near 98.30 and 97.50. Generally speaking, "the momentum is too high, the position is too high, and resistance is approaching," and the long-short fighting power is about to enter the peak of the game.
Outlook
Short term (next 1-2 weeks): The core variables are the employment strength signal given by ADP and its repricing of the December meeting. Scenario 1: If ADP is above 24,000 and is accompanied by a correction, the U.S. dollar index is expected to amplify momentum, try to break through 100.2200 and seek price at 100.70, and then there is a high probability that it will enter the "breakthrough confirmation-backtest-up again" path of 100.22-100.70. Technically, it is necessary to observe whether the retracement after the breakthrough can hold 100.2200. Scenario 2: If the reading is significantly lower than expected, or even records a net decrease again, the price may encounter resistance on the upper edge and fall back.The retracement target is 99.50. Once it falls, the 98.30-97.50 range will serve as secondary support within the channel, and the trend will turn to high oscillations.
Medium term (next January to March): The dominance of the policy path www.xmaccount.comes from the trade-off between "employment decline and inflation resilience". If inflationary pressure rises in stages and employment only weakens moderately, the Fed will be cautious and the pace of interest rate cuts may be slow, and the center of the US dollar maintenance channel will move upward; if employment continues to weaken, vacancies decline, wage expansion slows down, and inflation falls significantly, the downward shift of the curve will be faster, and the US dollar index may shift from the upward channel to a box or retracement structure. At that time, we need to pay attention to whether 98.30 has evolved into a key conversion level of "resistance to support".
The above content is all about "[XM official website]: ADP has made a final decision, and the US dollar is waiting for the verdict above the 100 mark?" It was carefully www.xmaccount.compiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!
Sharing is as simple as a gust of wind can bring refreshing, as pure as a flower can bring fragrance. Gradually my dusty heart opened up, and I understood that sharing is actually as simple as the technology.
Disclaimers: XM Group only provides execution services and access permissions for online trading platforms, and allows individuals to view and/or use the website or the content provided on the website, but has no intention of making any changes or extensions, nor will it change or extend its services and access permissions. All access and usage permissions will be subject to the following terms and conditions: (i) Terms and conditions; (ii) Risk warning; And (iii) a complete disclaimer. Please note that all information provided on the website is for general informational purposes only. In addition, the content of all XM online trading platforms does not constitute, and cannot be used for any unauthorized financial market trading invitations and/or invitations. Financial market transactions pose significant risks to your investment capital.
All materials published on online trading platforms are only intended for educational/informational purposes and do not include or should be considered for financial, investment tax, or trading related consulting and advice, or transaction price records, or any financial product or non invitation related trading offers or invitations.
All content provided by XM and third-party suppliers on this website, including opinions, news, research, analysis, prices, other information, and third-party website links, remains unchanged and is provided as general market commentary rather than investment advice. All materials published on online trading platforms are only for educational/informational purposes and do not include or should be considered as applicable to financial, investment tax, or trading related advice and recommendations, or transaction price records, or any financial product or non invitation related financial offers or invitations. Please ensure that you have read and fully understood the information on XM's non independent investment research tips and risk warnings. For more details, please click here