US Dollar Drops Significantly on Weak US Economic Data
2024.07.04 07:26
Good morning, everyone!
Markets may be a bit slow today due to the holidays in the US. However, there are elections in the UK, and we will get the nonfarm payroll report tomorrow, so we might still see some interesting price action at the end of the week.
Yesterday, the saw a significant drop due to disappointing jobs data in the private sector and weaker-than-expected ISM services PMI, which came out below expectations and even below the 50 level, indicating contraction.
This led to a decline in US yields, pushing the dollar lower, while stocks rallied on speculation that the Fed might be closer to potential rate cuts later this year.
Looking at the on the hourly time frame, there was a substantial push to the downside, even breaking the lower trendline support of a potential base channel, suggesting we are in an impulsive sell-off. But then the current rally should stop at the trendline resistance here, around 105.14. Simultaneously, watch the . If the trendline support connected from June 25th is broken, it could be bearish for the dollar going forward.
However, don’t forget about the US NFP tomorrow, which could significantly influence the markets.
Hope this update helps!
Grega
