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Session Recap: Correction day, weekly gain for the Dollar

FXStreet (San Francisco) - The US Dollar traded negative on Friday against its major competitors as the Greenback came under pressure after a weaker than expected US employment report and a profit taking before the weekend by the investors.

According to Kathy Lien from BK Asset Management, there is "a 70% chance of a USD correction next week." Lien explains that the Dollar run in the last weeks was due that the "Fed upgraded its assessment of the labor market." Lien continues saying that the Fed "set expectations for a very strong non-farm payrolls report." Thus, with a lower than expected NFP number, she expects a pullback.

"The greenback is extremely overbought and the lack of U.S. data next week should allow the dollar to catch up to the decline in U.S. rates." Lien also comments that the pullback is likely to be short lived as "we are still in the middle of a longer term dollar bull run."

However, the USD was the top performer once again this week with 1.88% gains versus the Yen; +0.69% against the Euro and 0.86% advance vs Pound and it seems it will remain as the king in the next week. According to the FXStreet Forecast Poll, the EUR/USD is diving into the Red Sea: "more weakness coming from the common currency with 1.20 seen possible in a 3 months view."

The EUR/USD rose for the first time in three sessions as the pair bounced off from lows since August 2012 at 1.2355 and closed at 1.2450. Valeria Bednarik from FXStreet states that "a downward acceleration through 1.2370 should see the pair extending its decline down to 1.2280/90 price zone, where the pair presents several weekly historical lows."

The GBP/USD bounced at 1.5800, lowest since September 2013 before closing at 1.5870. The USD/JPY lost the 115.00 position after reaching highs since November 2007 at 115.60.

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