Dollar bullish investors salvaged some inspiration during trading on Friday following the mixed NFP report which reinforced speculations of future US rates hikes this year. Although the 156,000 increase in December’s payroll failed to meet expectations, the healthy 2.9% rise in wage growth has offset some concerns consequently stabilizing the Dollar. This mixed report was released at a time where uncertainty still lingers over Donald Trump’s policies while fears over the effectiveness of the proposed fiscal stimulus continue to pressure the Dollar.
With the NFP now an event of the past, the main theme which may dictate where the Dollar trades this month should revolve around rate hike expectations. Repeatedly positive US domestic economic data in the coming weeks could also provide some encouragement for Dollar bullish investors to propel the Greenback higher. With Donald Trump’s inauguration on the 20th of January the next major event risk for the Dollar, prices sensitivity may intensify and such should create bursts of volatility. From a technical standpoint, bulls could reclaim some control on the Daily charts if the Dollar Index manages to break back above 102.50.
Commodity spotlight – Gold
The upside gains on Gold were limited on Friday following the mixed NFP report which installed Dollar bulls with inspiration. This zero-yielding metal remains extremely sensitive to US rate hike expectations with rising speculations of higher rates capping upside gains. A strengthening Dollar should provide a solid foundation for sellers to exploit the $1184 resistance to sending Gold prices lower. From a technical standpoint, the downside momentum may accelerate once the $1160 region has been breached.