Friday’s U.S. payrolls report offered a mixed picture with 261k new jobs in October and a higher unemployment rate of 3.7 percent. The payrolls advance was the least since December 2020 and given that the Federal Reserves’ aggressive tightening is weighing on employment, it’s only logical that the dollar fell in response to the report. Traders are leaning toward a downshift in the Fed’s pace of tightening to 50bp in December.
On November 8, the U.S. mid-term elections could lead to a change in which party controls Congress. However, the result’s impact to the dollar might be limited.
The market’s focus then shifts to the October consumer price index (CPI) due on Thursday. A lower reading would likely encourage more risk-taking. This could buoy the dollar’s counterparts on speculation the Fed could ease its rate-hiking path.
The British pound fell 2 percent as the Bank of England lifted rates to 3 percent and warned that the U.K. faces a protracted slowdown. Only Friday’s mixed payrolls report helped the pound to recover from lower levels on the back of a weakening dollar. However, sterling might be vulnerable to further losses with banks predicting a fall below $ 1.10 by the end of the year.
Our trading ideas for today 7/11/22:
Long @ 0.9960 Hit TP
Short @ 0.9915
Long @ 1.1330 Hit TP
Short @ 1.1290
Long @ 13480 Hit TP
Short @ 13430
Settings for all trades today: SL 25, TP 40
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.
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