USD at a 2 decade high ahead of jobs data
USD/JPT -> The pair rises to a 24-year high
Copper -> The commodity falls below 7550
Nvidia -> The stock falls to a 16-month low
USD/JPY rises to 140.00
The US dollar surged higher versus the Japanese yen after stronger than expected US data supports a more aggressive path of hiking interest rates by the Federal Reserve.
US jobless claims fell for the third consecutive week, dropping to a two-month low. Meanwhile, US ISM manufacturing unexpectedly expanded in August. The data fueled bets that the Fed could hike rates by 75 basis points when they meet next month, highlighting central bank divergence with the BoJ.
Today all eyes are on the US non-farm payroll report, which is expected to show solid job creation, albeit slower than last month’s impressive results. Hourly wages are also likely to tick high. Strong jobs data will cement expectations of a 75 basis point hike, lifting the USD.
| US NFP August | Expected: 300k (0.2%) | Previous: 528k |
Where next for USD/JPY?
USD/JPY has risen above 140.00 for the first time since 1998; there appears to be little near-term resistance suggesting that prices could continue to rise.
There is a bearish RSI divergence, and the 20 sma is crossing above the 50 sma in a bullish signal. The next level to watch could be 147.65, 1998 high; there is little in the way of resistance between the current level and the 1998 high. Near-term support can be seen at 136.90, the late June high ahead of 136.18, the 20 sma.
Copper falls to a monthly low
Copper tumbled 3% yesterday, marking the 5th straight day of declines.
The metal also referred to as Dr. Copper for its ability to indicate the health of the overall economy, is set to fall7% across the week. The latest leg lower comes amid rising fears of a global economic slowdown, a surprise contraction in China’s manufacturing PMI, and COVID-related lockdowns in a megacity of 21.1 million inhabitants.
Furthermore, broad USD strength added to the metal’s woes. Copper has fallen from its 2-month high over 8100 and is targeting 7150, the 2022 low.
Nvidia dropped 7.5% yesterday. Here’s why.
Nvidia sunk over 7.5% in the previous session after it was reported that US officials had told the chipmaker, along with other firms in the sector, that they can no longer sell artificial intelligence chips to China, which could have a significant impact on revenue.
The US is worried that the military could use these processors. The news comes as the company is already experiencing a slowdown in sales as demand for personal computers falls. A potential $400 million in sales in the third quarter could be lost. Sector peers Advanced Micron Technologies also fell sharply.
Support can be found at 132.70 (yesterday’s low) and 116.65 (March 21 low).
Resistance for the pair can be seen at170.25 (50 sma) and 192.70 (August 2022).
