✅ This Week in the Dollar Market: “Lack of Clear Direction”
Unstable Price Action Driven by Alternative Employment Indicators
With the U.S. government shutdown continuing, key macro data such as Nonfarm Payrolls and PCE cannot be released.
As a result, the market is reacting more to private-sector employment and sentiment indicators, creating choppy, directionless trading.
| Indicator | Outcome | Market Reaction |
|---|---|---|
| ADP Employment | Stronger than expected | Dollar buying picked up |
| ISM Services | Employment & prices both strong | Dollar buying continued |
| Challenger Job Cuts | Signaled rising layoffs | Recession fear → Dollar selling |
➡ Key Point: Conflicting signals mean the Dollar cannot establish a one-way trend.
🎯 Focus Today: University of Michigan Consumer Sentiment (Preliminary)
-
Forecast: 53.0 (vs. previous 53.6 → slight deterioration expected)
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Likely to improve: Current Conditions
-
Likely to weaken: Expectations for the future
📌 Most important sub-index: Inflation Expectations
With official inflation data delayed, markets are highly sensitive to this reading.
| Result | Deviation vs. Forecast | Market Tendency |
|---|---|---|
| Above forecast | Signals resilient demand → Dollar strengthens | USD/JPY may retest 154 |
| Below forecast | Signals weakening confidence → Dollar softens | Yen could strengthen on risk-off |
🏛 Also Watch: Remarks from Fed Officials
Speakers today include:
-
Williams (NY Fed)
-
Vice Chair Jefferson
Yesterday, several officials emphasized:
“Inflation is not yet convincingly contained → too early to discuss rate cuts.”
If repeated, this supports the Dollar on dips.
🇨🇦 Canada Employment Report Also Due
| Indicator | Forecast |
|---|---|
| Employment Change | -5,000 |
| Unemployment Rate | 7.1% |
📌 Key Market Focus: Full-time vs. part-time job growth
→ If job gains are mostly part-time → CAD tends to weaken
💱 Dollar Technicals (DXY)
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Current: 99.84
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Support: 10-day MA at 99.59
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Resistance: 200-day MA at 100.26
➡ Range-bound conditions remain, directional break is difficult for now.
✅ “Market Map” for Today
| Factor | Bias | Comment |
|---|---|---|
| Mixed economic indicators | Neutral | Trend is difficult to form |
| Fed commentary | Slightly USD bullish | Ongoing caution against early rate cuts |
| Government shutdown | Slightly USD bearish | Data uncertainty rises |
| Michigan Sentiment | Primary market mover today | Can trigger rapid volatility |
🔥 Short-Term Trading Strategy
Expected USD/JPY Range: 153.20 – 154.10
| Scenario | Likely Move | Strategy |
|---|---|---|
| Michigan beats forecast | USD/JPY → 154.20–154.40 test | Buy on dips and follow trend |
| Michigan misses forecast | USD/JPY → fall into 153.00s | Sell rallies below 153.20 |
📌 Do not chase the first spike — trade the second wave.
Initial reaction is often dominated by algos and can reverse sharply.
