NFP: On the Back of a Positive Report, Dollar Gains Traction

NFP: On the Back of a Positive Report, Dollar Gains Traction

The dollar is grappling with relatively positive NFP (non-farm payroll) gains, and it is sliding considerably during the US session. Stocks haven’t been very fired up, as DOW futures stays up only 0.2 percent at the time of writing. Nonetheless, the greenback is more likely to end the week as the top currency, trailed by the yen. The Canadian Dollar is coming back. However, the Australian and New Zealand Dollars continue to be the worst performers.

The number of people employed in the NFP (non-farm payroll) of the United States in June increased by 850 thousand, which is much higher than expectations of 675 thousand people. The indicator of the previous month was also revised upward from 559 thousand to 583 thousand. Total employment rose 15.6% since April 2020, but is down -6.5 million, or -4.4%, from the pre-pandemic level in February 2020.

BLS, Bureau of Labor Statistics also reported that “notable job growth has occurred in the leisure and hospitality industry, public and private education, professional and business services, retail, and other services.”

The unemployment rate rose to 5.9% from 5.8%, above expectations of 5.6%. But the number of unemployed remained practically unchanged and amounted to 9.5 million. People. The labor force participation rate remained unchanged at 61.6%. Average hourly earnings rose 0.3% MoM, versus 0.4% MoM expectations.

Post NFP, GBP/USD Rises Beyond 1.3750 Despite Virus Fears

GBP/USD is currently trading over 1.3750, which is higher than pre-Nonfarm Payrolls levels. While the US jobs numbers exceeded expectations, the event sparked a drop in the dollar following an initial increase. Sterling is under pressure due to concerns about the Delta virus type.

As the four-hour chart shows, the pound/dollar is trading around the levels observed in mid-April, clinging near the lows. This has pushed the Relative Strength Index (RSI) close to 30, indicating that the market is approaching oversold territory and a potential bounce. However, the pair is still trading below the 50, 100, and 200 simple moving averages, indicating that momentum is still to the downside.

The recent low of 1.3743 provides immediate support, followed by 1.3720, a swing low from April. The key level to keep an eye on is 1.3670, which was a double bottom in April and is also the lowest since February.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
Share with other traders!

Author : Azeez Mustapha

Avatar

Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.