US dollar struggles ahead of the US nonfarm payrolls data

US stocks rallied yesterday, helped by the technology sector after the relatively strong US manufacturing data. The S&P 500 closed above $4,000 for the first time on record while the Nasdaq 100 index rose by almost 2%. At the same time, the 10-year Treasury note declined 1.67% from the year-to-date high of 1.76%. In addition to manufacturing data, the market is excited about Joe Biden’s $2.3 trillion infrastructure package that will include roads and bridges, research and development, and broadband. 

The US dollar declined against most currency peers as traders waited for the latest US nonfarm payroll numbers that will come out later today. Economists expect the data to show that the economy added more than 575,000 jobs in March as the country continued to open. This will be a better figure than the 465,000 jobs that were created in February. The unemployment rate is expected to fall from 6.2% to 6.0% while the average weekly hours are expected to rise to 34.7. The average hourly earnings are expected to fall to 4.5%. The data will come a day after the US released weak initial jobless claims numbers.

Activity in the stock and currencies market will be relatively muted today because most countries will be observing the Easter holiday. Among the exchanges that will be closed are those in London, New York, and Frankfurt. Still, traders will continue to watch the cryptocurrencies industry, where Bitcoin is approaching $60,000 and Ether is approaching $2,000.

EUR/USD

The EUR/USD pair rose to an intraday high of 1.1775 as US bond yields cooled down. On the four-hour chart, the pair has moved above the 25-day and 15-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has moved above the oversold level of 30. The pair is still slightly below the descending trendline shown in yellow. Therefore, the downward trend will remain so long as the price is below this line.

GBP/USD

The GBP/USD pair jumped to 1.3850, which was the highest level since March 23 after the strong UK manufacturing data. On the hourly chart, the price managed to move above the important resistance at 1.3845. It has also risen above the 25-day and 15-day exponential moving averages (EMA) while the Average True Range (ATR) has declined. The pair will likely keep rising as bulls target the next key resistance level at 1.3880.

US30

The Dow Jones index rallied to $33,200, which is the highest it has been since March 29. On the hourly chart, the price is slightly above the important 25-day and 15-day EMAs. It is also slightly below the all-time high of $33,254. The momentum indicator and the Relative Strength Index (RSI) has continued rising. The index will likely keep rising as bulls eye the next important resistance at $34,000.