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Dollar retreats as US Treasury yields sag after American jobs data – 10 Nov 2014

the dollar retreated today as US Treasury yields sagged, after Friday’s U.S. jobs data fell short of expectations and prompted some investors to take profits on extremely long dollar positions. The dollar index slipped about 0.3 percent to 87.368, following a 0.4 percent fall on Friday when it retreated from 88.190 – a high not seen since June 2010.The disappointing headline figure prompted a rally in U.S. Treasury prices and knocked yields off one-month peaks hit shortly before the release of the jobs data. The yield on benchmark 10-year Treasury notes stood at 2.304 percent in Asian trade, below its U.S. close of 2.312 percent on Friday. The lower yields undermined the dollar. The euro added about 0.2 percent to $1.2485 from a two-year trough of $1.2358 touched on Friday. Technically speaking, the euro changed its trend from sideways to up on 4-hour chart. Current resistance stands at the area between 1.2533$ & 1.2631$, second resistance is in the area between 1.2770$& 1.2930$ and the main resistance stands at 1.3029$. The recent price bottom failed to touch the middle boundary of the Bollinger Bands which confirms the price strength. The stochastic indicator broke up its middle line which is also a sign of strength. The CCI indicator broke up its overbought area which signals more gains. On the downside, current support lies at its previous bottom 1.2464$, second support is 1.2357$ and the main support lies at 1.2241$.

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Recent data has shown that the U.S. economy is outperforming Europe and Japan and has highlighted the diverging policy outlooks between the Federal Reserve and the European Central Bank and the BOJ. This has supported a four-month long rally in the dollar, but Friday’s reaction suggested investors were starting to turn a bit cautious in the face of massive dollar-long positioning. Speculators raised net long U.S. dollar positions in the week ended Nov. 4 to the highest in at least six years, data from the Commodity Futures Trading Commission showed on Friday. The greenback slid about 0.4 percent on the day to 114.18 yen, well below Friday’s seven-year high of 115.60. On technical basis, the USD/JPY is still in a sideways trend on 4-hour chart. First support lies at the area between 113.16yen &112.36yen, second support is in the area between 109.15 yen & 108.74yen and the main support lies at the area between 107.94yen & 107.60yen. The recent price peak failed to reach the upper boundary of the Bollinger Bands then the price broke down the middle boundary of the Bollinger bands which confirms the price weakness. The stochastic indicator broke down its middle line which is also a sign of weakness. The CCI indicator broke down its oversold area which signals more losses. On the upside, if the pair manages to break up the area between 115.59yen & 115.92yen, it will face next resistance at 117.94yen and the main resistance stands at119.83 yen.

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Amana Capital Group is a Financial Services Group specialized in providing brokerage services in international financial markets namely currencies, commodities, and stock indices. The Group operates several entities regulated and authorized by reputable regulatory bodies.

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