US Dollar: forecast for May 9-15
US labor market data came out mixed on Friday. The economy added only 160K new jobs in April, while the March reading was revised down to 208K. At the same time, average hourly earnings growth accelerated to 0.3%.
The US Dollar developed a bullish correction last week and extended the move on Friday, retracing from the 92 points low to almost 94 points. From the technical view, the US currency found support at the 2015 lows.
However, the jobs report failed to shed the light on the Fed’s decision at the June meeting – there is still a lot of uncertainty. In our view, the economic data is not strong enough to justify a hawkish Fed in June, so the greenback still remains highly vulnerable for selling in the coming weeks. A double top with targets around 80 points could be formed in the coming months.
Watch the US crude oil inventories figures on Wednesday. On Thursday pay attention to jobless claims data and import prices. FOMC members George and Rosengren will deliver their speeches as well. On Friday the market focus will turn to the producer price index and retail sales data.