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Talking Points:

- This morning’s Non-Farm Payrolls data out of the United States caps off a busy week in an interesting way. The headline print of +313k crushed the expectation of +205k; but disappointing Average Hourly Earnings has helped to temper any bullish drive in the US Dollar. This highlights the importance of inflation data to near-term USD[1] price action, while the longer-term theme of weakness, driven in-part by fiscal policy in the United States, remains a factor of consideration.

- DXY[2] is testing above the 90.00 level, which has been an area that’s given the currency trouble over the past month, as each test above 90.00 up until now has been soundly faded out of USD. This morning’s move has created some interesting setups in the major pairs of EUR/USD[3] and GBP/USD[4]. EUR/USD is in the process of testing support, while GBP/USD is working on near-term resistance.

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NFP Headline Prints at +313k, Average Hourly Earnings Disappoints

This morning’s Non-Farm Payrolls data from the month of February[9] blew the doors off, coming in at +313k versus the expectation of +205k. The unemployment rate held steady at 4.1% as the labor force expanded last month; but Average Hourly Earnings came-in at 2.6% versus an expectation of 2.8%. This comes on the heels of last month’s AHE print that was originally released at 2.9%, but that was downgraded this morning to 2.8%.

The net response thus far has been a rather meager move in the US Dollar, with a net bias of weakness. Initially a quick move of weakness was bid back to resistance; but sellers showed up quickly to push prices right back to where we were when everything started. Follow-thru price action appears to be pointing-lower, but this is still extremely early to foretell a continuation of the longer-term theme of weakness in USD; and there are still some significant factors in play around the fiscal side of the US economy at the moment[10].

US Dollar Price Chart via ‘DXY’: Hourly Time-Frame, Doji Prints Around NFP Release

us dollar price chart hourly time frame

Chart prepared by James Stanley[11]

The fact that there was not a more discernable move of strength highlights the pertinence of inflation data in the United States, particularly in relevance to short-term price action in the US Dollar. Last month saw a spate of strength develop in the Dollar’s year-plus down-trend on

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