Diplomatic Solution Overshadows US JOLTs Job Openings Beat

U.S. DOLLAR ANALYSIS

• US JOLTs Openings (JAN) – ACT: 11.263m; EST: 10.925m

DOLLAR FUNDAMENTAL BACKDROP

JOLTs smashes forecasts!

The U.S. dollar index dismissed positivity around the US JOLTs job openings release at 11.263m which significantly beat estimates.

Source: DailyFX economic calendar

This echoes last week’s Non-Farm Payroll (NFP) print thus reinforcing the strong labour market in the U.S. with the Federal Reserve interest rate decision around the corner. Money markets are currently pricing in a 95% chance of a 25bps hike which is unlikely to change short-term despite the potential for a diplomatic solution between Ukraine and Russia.

FED RATE HIKE PROBABILITIES

Source: Refinitiv

TECHNICAL ANALYSIS

U.S. DOLLAR INDEX DAILY CHART

Chart prepared by Warren Venketas, IG

The daily DXY chart shows the turnaround post the announcement from Ukraine to open up to diplomatic solutions with Russia. The sharp downturn shows the overextension of positioning to supported by the RSI lingering in overbought territory.

Resistance levels:

Support levels:

• 97.92
• 20-day EMA (purple)
• 97.00

Contact and follow Warren on Twitter: @WVenketas