JCI lower ahead of Non-Farm Payrolls

Written by Lukman Otunuga, Research Analyst at FXTM

Indonesia’s Jakarta Composite Index moved – 0.12% lower to 6031.107 on Thursday, ahead of Friday’s anticipated NFP release. With pending US jobs data potentially reinforcing expectations of a Fed rate hike in December, emerging market stocks and currencies could come under pressure as the Dollar appreciates. Although sentiment continues to improve over the largest economy in Southeast Asia and the overall outlook remains encouraging, a resurgent Dollar still poses external risks.

Interestingly, the Rupiah stood its ground against the Dollar on Thursday, with the USDIDR trading towards 13550 as of writing. A strengthening Dollar may encourage participants to send the USDIDR towards 13600.

Bitcoin sprints past $7000….

It’s another day, another fresh record high for Bitcoin which climbed past $7000 during early trading on Thursday. This has been another incredibly bullish week for the cryptocurrency with the visible upside attracting investors from all directions. With Bitcoin surging over 640% this year and its total value currently worth more than a whopping $100 billion, it’s fair to say the outlook is looking increasingly encouraging. It must be kept in mind that Bitcoin’s exponential gains are not only phenomenal but somewhat frightening and it will be interesting to see where prices close this year. Taking a look at the technical picture, Bitcoin is extremely bullish on the daily charts. A weekly close above $7000 may inspire buyers to push the cryptocurrency towards $8000. With the upside almost gaining momentum by the day, could Bitcoin hit $10000 before year end?

Dollar searches for catalyst

The Greenback surprisingly edged lower against a basket of major currencies on Thursday as investors digested November’s relatively hawkish statement from the Federal Reserve.

With the central bank stating that the “economic activity has been rising at a solid rate despite hurricane-related disruptions”, expectations of a rate hike in December rose to 96.7%, according to CME’s Fedwatch tool. Today’s main attraction in the United States and risk event for the Dollar will be US jobs report. A strong NFP has the ability to bolster expectations of a rate hike in December consequently supporting the Dollar.

Taking a look at the technical picture, the Dollar Index remains bullish on the daily charts. Prices are currently in a wide range with minor support at 94.40 and resistance at 94.90. A catalyst may be needed in order for the Dollar Index to break from the range and this could come in the form of Trump’s nomination or NFP in Friday.

Currency spotlight – EURUSD

The Euro has had a calm trading session these past days when compared to the chaos witnessed last week. With the political drama in Spain somewhat cooling after Madrid suspended Catalonia’s political autonomy and sacked Carles Puidgemont, investors have redirected their attention towards Europe’s fundamentals. On the data front, Eurozone inflation unexpectedly dipped to 1.4% in October from 1.5% in September which supported the dovish ECB QE tapering.

From a technical standpoint, the EURUSD has traded in a range this week with support at 1.1600 and resistance at 1.1680. Sustained weakness below 1.1680 may encourage a further decline towards 1.1600 and 1.1500 respectively. In an alternative scenario, prices need to break back above 1.1730 for bulls to jump back into the game.


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