My top line thoughts.  As you probably know the primary focus next week will on the extent of damage hurricane Irma had on sentiment, (ISM’s) and jobs, (NFP). In the case of US jobs risks are firmly to the downside with many estimates ranging from 75K-95K  Anything positive should get a exponential lift in USD terms.  Let’s also not forget Yellen made it quite clear (in my eyes anyway) this figure will be overlooked if bad. After all it is just one month and the Fed often likes to use a 3 month average. I’m not also in any way suggesting they refer to this when it suits them. 😉

USD bulls will no doubt be on the lookout for a bargain and at current prices they may already be circling to pounce.  A little context from last week. The USD run post Wednesday’s so called “tax reform” gave up the goose. DXY is faltering a touch with the main components – EURUSD and USDJPY showing early signs of a reversal. EURUSD stayed above 1.1770 (which is significant) and USDJPY failed at 112.90 Also, both of the moving averages I use (100 and 200) have nearly caught up with price – which is the case for USDJPY. See chart below.

Have an excellent weekend and watch that risk now

Patrick Reid
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