The US dollar has been in a corrective mode lately but was attempting to renew its rally for the last several trading sessions. Is this a sign of resumption of a bullish trend or just a noise on the market?
The greenback was struggling to regain its footing during the past week. The string of poor macroeconomic reports was hampering such attempts while the speech of Janet Yellen, Chairperson of Federal Reserve, supported the US currency in its struggle. The important message in the speech was that the timing of an interest rate hike will be very data dependent. This means that economic indicators should have even bigger than usual impact on the currency.
So what reports might affect the dollar during the current trading week? The most important of them undoubtedly will be non-farm payrolls. The employment data was stellar in March, propelling the currency higher at the beginning of the month. While economists predict that the coming report will show somewhat smaller figure, they still think that employment growth should be very solid. If that is the case, then the greenback will likely continue its move higher. Conversely, in case of worse-than-expected reading the US currency may find itself in deep trouble.
Among other important economic releases for the week will be the consumer sentiment, the trade balance and several employment reports that will give traders a feeling of the US labor market health ahead of the NFP release. Data about personal income and spending as well as about pending home sales has been already released on Monday. It was good for the most part with the exception of personal spending that fell short of expectations.
Outside of the United States, Greece and its debt problems should have a big impact on the Forex market. The woes of indebted country may fuel demand for the dollar as a safe haven, especially after the negotiations with the European creditors stumbled yet again.
All in all, it looks like the dollar has a bullish setup, though there is always a danger that speculators who are seeking a quick profit may drive the market contrary to long-term fundamentals.
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Dollar Has Bullish Setup Ahead of NFP
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