US Dollar Weakness - Can NFP Soften the Pressure?
Though the U.S. preliminary PMI accelerated, the eurozone and Japan showed a contraction in business activity. With Japan and the EMU wrestling with deflation (falling prices), the U.S. CPI (headline and core) is above 1%.
While the unemployment rates in the euro area and Japan are expected to make new cyclical highs, the U.S.'s unemployment rate is expected to continue to ease.
The U.S Dollar Index is under strong selling pressure, the 92.00-level gave way. It stopped shy of 91.75 seen on September 1. There appears to be little meaningful support below there ahead of the 90.00 area. The RSI and Slow Stochastic are over-extended, while the MACD is trending lower. The lower Bollinger® Band comes in near 91.50. A move back above the 92.00-92.20 band would help stabilize the technical tone.
The upcoming NFP data release may not be enough to soften the blow. Thoughts?
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