USD Shows Weakness Versus The Forex Majors
Shain Vernier • 1 min read
The Greenback is under fire from the forex majors, losing market share at every turn. Today’s big movers have been the EUR/USD (+0.49%), USD/JPY (-0.57%), USD/CAD (-0.24%), and the USD/CHF (-0.67%). In each pair, currency traders have lined up to sell the USD. Is this the beginning of the 2021 rout that many predict will hit the Greenback?
For the second straight day, the U.S. economic calendar has been vacant. However, there were a few peripheral items released throughout the morning. Here are the highlights:
Event Actual Previous
NFIB Business Optimism Index (Jan.) 95.0 95.9
Redbook MoM (Feb. 6) -2.5% -1.6%
JOLTS Job Openings (Dec.) 6.646M 6.572M
No doubt about it, the American labor market has been under severe scrutiny over the past few weeks. However, today’s JOLTS Job Openings (Dec.) suggest that the situation may be modestly improving. Unfortunately for many industries, it still appears that a COVID-19 recovery remains elusive. For forex players, there aren’t many good reasons for sticking with the Greenback today.
Forex Traders Dump The USD
In a Live Market Update from yesterday, I outlined a buying opportunity in the USD/JPY. Unfortunately, the trade was a miserable loser. The 38% Fibonacci support level outlined at 104.82 wasn’t even remotely effective.
Currently, the USD/JPY is testing another key support level. In the event the Daily SMA holds (104.60), this pair may be poised for a midweek bounce.
Overview: At press time, the Dow Jones Industrial Average DOW (DJIA) has reversed early losses into new all-time highs. Right now, the sentiment is risk-on and selling the USD is in vogue. Perhaps the scene will shift with Wednesday’s Inflation Rate (Jan.) and Core Inflation Rate (Jan.) releases. If we see a significant uptick in inflation from December’s levels, the Greenback will likely turn in a better performance than it did today.