US DOLLAR RISES AS STRONG NFP POINT TO MORE FED HIKES

The US dollar rose slightly on Monday morning as investors reflected on the strong American jobs data. On Friday, data by the Bureau of Labor Statistics (BLS) showed that the American economy added over 431k jobs in March this year. This increase was strong even though it was lower than the 750k jobs that were created in February. The unemployment rate declined to 3.6%, the lowest level since the pandemic started. Wages also kept rising in March. As a result, there is a likelihood that the Fed will be more hawkish. In a statement to the FT, Fed’s Mary Daily said that she would support a 50 basis point hike in May. She estimates that the neutral rate will be between 2.3% and 2.5%.

The euro declined against the British pound and the US dollar as the EU considers more sanctions against Russia. There are also concerns that the EU will soon have a gas crisis now that the bloc has rejected the proposal to pay for its deliveries in euros. The currency will react to the latest German trade numbers that will come out in the morning session. Analysts expect these numbers will show that the country’s imports rose by 1.45 while exports rose by 1.5%. As a result, the trade surplus is expected to have increased to over 9.6 billion euros. The EU will also publish the latest producer price index data.

The economic calendar will have a few additional events today. In the United States, the statistics agency will publish the February factory order numbers. Analysts expect that these orders rose by 1.4% in February. The other key data to watch will be the Turkish consumer price index data, which is expected to show that the headline CPI rose by 61.60% in March. Earlier today, the Australian Bureau of Statistics published strong retail sales numbers. The data came as the Reserve Bank of Australia (RBA) started its monetary policy meeting.

EURUSD

The EURUSD pair maintained a bearish trend as the US dollar rose. It declined to a low of 1.1042, which was lower than last week’s high of 1.1185. It has also dropped below the important support at 1.1138, which was the highest point on March 18. It has also moved below the 25-day and 50-day moving average while the RSI has moved below the neutral point at 50. Therefore, the pair will likely keep falling today.

GBPUSD

The GBPUSD has been in a tight range in the past few days. It is trading at 1.3110, which is also lower than March 23 high of 1.3296. It has also moved slightly below the 25-day moving average while the MACD is slightly below the neutral level. Therefore, the outlook for the pair is neutral with a bearish bias.

EURCHF

The EURCHF pair has been in a tight range in the past two days. It is trading at 1.0220, which is lower than last week’s high of 1.0384. On the four-hour chart, the pair has moved below the 25-day MA. It has also formed a small bearish flag pattern while the Relative Strength Index has moved slightly above the oversold level. Therefore, the pair will likely keep falling today.