USD: NFP risk skews to softer data – Societe Generale

💡 DMK Insight

The Dollar’s weakness ahead of the US NFP report is a critical signal for traders: Societe Generale’s observations highlight a shift in market sentiment, driven by disappointing retail sales figures. This has led to increased demand for Treasuries, indicating that investors are seeking safer assets amid uncertainty. For day traders and swing traders, this could mean a short-term bearish outlook on the Dollar, especially if the NFP data confirms the trend of weak economic indicators. Keep an eye on the 10-year Treasury yield; if it continues to drop, it could further pressure the Dollar. But here’s the flip side: if the NFP report surprises to the upside, we could see a rapid reversal. Traders should monitor the 102.00 level on the Dollar Index as a key support point. A break below this could trigger further selling pressure. Watch for volatility in related markets, particularly in equities and commodities, as they often react sharply to shifts in the Dollar’s strength. The immediate focus should be on the NFP release, but positioning for potential longer-term trends is equally important.