This morning’s release of January Non-Farm Payrolls came-in above expectations, with jobs added last month out of the U.S. coming in at +200k versus the expectation of +180k. Ahead of this morning’s release, the U.S. Dollar remained relatively weak, continuing a trend that’s been in-place for now more than a year. We looked at the possibility of the Dollar being a bear trap type of scenario in yesterday’s article, and on the back of this slight beat on NFP, we’re seeing USD-strength show up.

U.S. DOLLAR (DXY) 15-MINUTE CHART: STRENGTH POST-NFP

The bigger question, as is often the case with Non-Farm Payrolls, is one of continuation potential. With USD holding on to that longer-term bearish trend, last week’s lurch lower helped to drive the market into even deeper oversold territory. This week has been marked by back-and-forth price action with a hint of a bearish bias, as sellers continued to show up around short-term resistance, but seemed to get gun-shy as prices approached prior support. While this, in-and-of-itself, is not direct evidence of a bottom being in place, it is a common first step if we are to see a retracement or reversal of that prior trend. With the Fed’s March rate decision carrying a strong probability of a hike, this opens the door to the prospect of a pullback in the USD downtrend as we approach that meeting on March 20-21.

U.S. DOLLAR WEEKLY CHART: FIBONACCI SUPPORT HOLDING THIS WEEK