The dollar is in jeopard: getting ready for the NFP

4. Okt. 2019

If you look at the dynamics of the Dollar Index yield at the beginning of the month, you might note that the maximum number of sales were on January, March, April, May, June, August, September and October. In general, it’s time to form a trading strategy: we are waiting for the beginning of the month and at around 3rd of October we are selling the dollar. With a probability of 80%, you can count on.

The dollar has confidence in its power. This is what we have been expecting for a long time. In yesterday’s review, we noted the anomalous value of the dollar ( too high). And its decline finally happened. But for the further development of the downward movement, at least today, one more factor is needed.

We are talking about statistics on the US labour market. If the NFP figures turn out to be worse than forecasts, the dollar will receive a powerful impetus for the development of the correction and will be sold out. We consider this scenario as basic.

Data within the forecasts to come out +/- is rather against the dollar, than “for”. The figure +145 +/- is much lower than the average NFP number over the past couple of years, which fluctuates around 170-180K, which confirms that the US economy is slowing down. This will give markets a signal that the Fed will be forced to cut the rate at least 1 more time in 2019. And this is more than a serious reason for the sale of the dollar.

In general, the dollar can be saved with the NFP figures in the region above the average, that is, above 180K, and preferably 200K. In this case, the US dollar may well stop its fall. Since the probability is small, today we will sell the dollar.

Gold purchases, as we can see, are again relevant. So today, in the light of dollar weakness and deterioration in the general state of the US economy, we will continue to look for points for gold purchases.

By the way, weak data on NFPs may well trigger sales in the oil market. The key point is concerned about the growth rate of non-oil demand, which in turn is directly related to the state of the world economy. Weak data will confirm fears that global growth will continue to slow, which in turn will make us think about a slowdown in oil demand. So this will be a bearish signal for the oil market. So today we are also inclined to look for points for the sale of oil since the current goal of the downward movement of oil was achieved yesterday.

At the same time, we cannot fail to note that our recommendation on the oil market was given on Monday: to sell oil at current prices at that time of about 56.30 with targets at the bottom of 51 yesterday worked out well. So those of our readers who trust and listen to our opinion should meet Friday in a very good mood. + 10% excluding leverage in less than a week - this is very good.