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Dollar Gains Ground on Trade Talk Hope01 February 2019 by Dave Evans

Morning Report: 07.00 London

The dollar index is making gains again this morning as traders raise their hopes of a trade meeting between Xi and Trump. In addition, yesterday’s disappointing economic data is being overridden by positive expectations for today’s Non Farm Payroll release.

Most dollar pairs are on the back foot, with the AUD/USD reversing all of yesterday’s gains and dropping below the 0.7250 level.

The EUR/USD is on the back foot, following up on yesterday’s outsized losses that saw the pair drop below 1.1450. The GBP/USD is holding up relatively well, holding the 1.3100 level. The EUR/GBP is slipping lower again following yesterday’s reversal.

The USD/CAD is reversing higher, making good all of yesterday’s losses. Meanwhile, the USD/CHF is holding the 0.9950 level.

The USD/JPY is making small gains, while other yen pairs slip back. The AUD/JPY is below resistance at 79.00, while the EUR/JPY is selling again after a failed attempt on 125.00. The GBP/JPY is unchanged however.

Coming up today

Today, we have UK manufacturing PMI at 09.30.

European flash estimate CPI is at 10.00.

The main event is US Non Farm Payrolls which are due at 13.30, alongside the unemployment rate and average hourly earnings.

US ISM Manufacturing is at 15.00, released alongside revised UoM consumer sentiment.

Trade Idea

The EUR/JPY has been range bound since the new year opening flash crash, but with the euro under pressure and the yen dominant, we could see further downside from here.

Dollar Gains Ground on Trade Talk Hope

A good way to play this is a LOWER trade predicting that the EUR/JPY closes below 124.00 in 14 days for a potential return of 165%.

Dollar Gains Ground on Trade Talk Hope