DXY extends gains post positive Job Data

Midday Update

Most major currencies continued to tumble against the US Dollar early Monday morning as commodity prices continue to soar amid the Ukraine/ Russian war.

The Dollar Index is the strongest among the safe-haven assets leveraged by the Friday employment data in that US indicates serious growth.

There will be a round 3 of talks between Moscow and Kyiv and investors are sitting on the edge to see the outcome of the meeting scheduled at 1400GMT.

The USD Index surged during Monday morning as investors increased bids on the safe-haven assets. The dollar got a boost from better-than-expected employment data released on Friday. Non-farm payrolls jumped from 481 000 jobs for January to 678 000 for February while the unemployment rate dropped from 4.0% to 3.8% indicating economic recovery amid fading pandemic pains.

The index rose 0.77% as bulls attempted a target at 100.00, near-term psychological resistance. The EURUSD continued to suffer losses as the investors worried over the impact of the Russian war in the Eurozone.

The ECB policy meeting minutes will be released on Thursday and investors are anticipating a policy change as the economy begins to suffer from soaring inflation amid rising commodity prices. On Monday, the EURUSD edged lower reaching 1.0805 near-term low before a rebound, as the Sentix investor’s sentiment indicator showed a huge drop from 16.6 to -7 vs. the expected 5.3 for March.

AUDUSD shaded off some of its early gains during the European session as the Dollar weighed on the commodity-backed pair. The pair remains bullish in the near term as soaring commodity prices push up the risk-sensitive pair. The pair retraced after hitting 0.7440 which coincides with 8 November 2021 highs and room for expansion to the upside towards 0.7550 is growing.

AUDJPY extended gains above 85.00, early Monday morning as the Japanese economy takes a hit from soaring commodity prices. The pair is currently trading above the 50-day moving average on a 4-hour chart and a corrective pattern could be due towards 84.30 resistance turned support.

US indices closed lower on Friday as better-than-expected US employment data reinforce sentiments of an aggressive rate hike this March. The Nasdaq 100 lost -1.41% as the price remains capped with 14400 resistance which coincides with a 50-day moving average on a 4-hour chart. The DJIA dropped -0.53% after bulls lost momentum below 34000 near-term resistance.

The European indices opened lower across the board on Monday, with Dax losing -4% with financials and consumer goods (including oil and gas) leading to the downside. The CAC 40 was down 2% and bears found a near-term barrier at 5750, a daily low. The FTSE is currently down -0.48% and bears seem to scale out profit after finding a near-term low at 6755.0.

On commodity markets, Spot Gold hit $2000 early Monday as risk-averse investors continue to push the commodity prices higher. The yellow metal breached a near-term resistance at $1975 high prices pushed to $2000 high which was last seen in August 2020.