U.S. Dollar (DXY) Retreats As JOLTs Job Openings Decline

Key Insights

• Weak job market data put pressure on the American currency. 
• EUR/USD gained strong upside momentum after PPI reports. 
• GBP/USD is moving higher as its strong rebound continues. 

U.S. Dollar Remains Under Pressure

U.S. Dollar Index gained strong downside momentum and moved below the 111 level as its pullback continued.

Today, U.S. released JOLTs Job Openings report for August, which indicated that job offers declined from 11.17 million in July to 10.05 million in August. The rapid decline in JOLTs Job Openings is bearish for the U.S. dollar as it shows that the job market has finally found itself under pressure.

Traders also had a chance to take a look at the Factory Orders report for August. The report indicated that Factory Orders remained unchanged on a month-over-month basis, in line with the analyst consensus. This report had minimal impact on currency dynamics.

EUR/USD Tests Resistance At 0.9950

EUR/USD continues to rebound and is trying to settle above 0.9950. Today, EUR/USD traders focused on Euro Area Producer Prices reports, which indicated that PPI increased from 38% in July to 43.3% in August, compared to analyst consensus of 43.1%.

The rising PPI provided material support to the European currency as the ECB will be forced to raise rates aggressively to fight inflation.

GBP/USD Moved Towards The 1.1400 Level

GBP/USD is trying to settle above the 1.1400 level as its strong rebound continues.

From a big picture point of view, GBP/USD returned to levels that were seen before the rapid sell-off which pushed GBP/USD towards 1.0350.

GBP/USD settled above the resistance at 1.1365 and is moving towards the next resistance level at 1.1450. In case GBP/USD settles above 1.1450, it will head towards the next resistance at 1.1500. A move above 1.1500 will push GBP/USD towards the 50 EMA at 1.1565.

On the support side, the previous resistance at 1.1365 will serve as the first support level for GBP/USD. If GBP/USD declines below this level, it will head towards the support at the 20 EMA at 1.1275. A successful test of the support at the 20 EMA will push GBP/USD towards the support at 1.1210.

Commodity-Related Currencies Are Mostly Flat Despite Strong Rally In Commodity Markets

Commodity-related currencies are swinging between gains and losses despite strong rally in oil, natural gas, and precious metals.

AUD/USD is stuck near 0.6500, while NZD/USD is trying to settle above 0.5750. USD/CAD is trading near the 1.3600 level.

Today, RBA raised the interest rate from 2.35% to 2.6%, compared to anlayst consensus of 2.85%. RBA does not want to put too much pressure on the economy, and it looks that its decision has hurt all commodity-related currencies.

USD/JPY Is Stuck Near 144.50

USD/JPY is trading near 144.50 as traders fear that BoJ will intervene if USD/JPY gets above the 145 level.

The Japanese yen remains fundamentally weak, but the BoJ managed to provide some support to the currency.

However, it looks that another test of the 145 level will be inevitable if the U.S. dollar rebounds after today’s sell-off.

For a look at all of today’s economic events, check out our economic calendar.