Sat, Oct 23, 2021 @ 16:34 GMT
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Weak Dollar Awaits Jobs Rescue

DXY is posting its 5th consecutive daily decline, the longest string of losses since April. Thursday’s release of weekly jobless showed a slight decline as expected, but it was Wednesday’s poor ADP employment report and hawkish ECB comments in response to highe Ezone CPI that helped accelerate USD selling. ADP does have a spotty record but the soft August reading adds to the mounting evidence that the US economy isn’t as strong as believed. The NASDAQ charts below suggest a short-term trading opportunity in NASDAQ100 based on 4 prior cases. We let the charts speak for themselves.

The ADP employment report showed the US adding just 374K jobs in August compared to 640K expected. That was compounded by the employment component of the ISM manufacturing report falling below 50.

The pandemic-era history of the ADP report and the small size of manufacturing employment in the US make both metrics questionable but they underscored the market’s focus on jobs at the moment. The dollar fell 30-40 pips across the board on the data in only a small preview of the decline should non-farm payrolls match the miss.

Another spot to watch is the weekly US natural gas storage report, which is expected to show a build of 20 bcf. Last week’s surprise miss helped to send gas prices into high gear in the US and into overdrive in Europe and Asia. The base case for global central banks is that the flattening of energy prices flattens out inflation but natural gas – which is critical in home heating and energy generation – could add another front to watch on prices; and one that could present a big headache for politicians and central bankers. Moreover, this is not traditionally the peak of natural gas prices for the year with every recent seasonal spike coming in the cold months. So expect to hear much more about NG and LNG in the months ahead.


Ashraf Laidi
Ashraf Laidi is an independent strategist and trader, founder of Intermarket Strategy Ltd and author of "Currency Trading & Intermarket Analysis". He is the former chief global strategist at City Index / FX Solutions, where he focused on foreign exchange and global macro developments pertaining to central bank policies, sovereign debt and intermarket dynamics. Ashraf had also served as Chief Strategist at CMC Markets, where he headed a global team of analysts and led seminars and trainings in four continents. His insights on currencies and commodities won him several #1 rankings with FXWeek and Reuters. Prior to CMC Markets, Laidi monitored the performance of a multi-FX portfolio at the United Nations, assessed sovereign and project investment risk with Hagler Bailly and the World Bank, and analyzed emerging market bonds at Reuters. Laidi also created the first 24-hour currency web site for traders and researchers alike on the eve of the creation of the euro. Laidi's analysis of currency markets stand out based on his distinct style in bridging the fundamental and technical aspects of the markets. Laidi regularly appears on CNBC TV (US, Europe, Arabia and Asia/Pacific), Bloomberg TV (US, Asia/Pacific, France and Spain), BNN, PBSs Nightly Business Report, and BBC. His insights also appear in the Financial Times, the Wall Street Journal and Barrons. He has given numerous interviews and lectures in Arabic, French, and to audiences spanning from Canada, Central America and Asia/Pacific.

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