Dollar Trades Mixed: ADP Disappoints, Shutdown Adds Risks
The US dollar showed a mixed performance: a weak ADP employment report (-32k versus the forecast of growth) heightened doubts over the resilience of the labour market, while uncertainty surrounding a US government shutdown added further pressure on the greenback. Markets are pricing in risks of delayed publication of key economic data, including the nonfarm payrolls report, which could complicate the Federal Reserve’s policy decisions in the coming months.
In the USD/JPY pair, the dollar continues to lose ground, falling towards the 147.00 level, where short-term support is located. The pressure is reinforced by a combination of weak US data and stronger demand for the yen as a so-called safe-haven asset. Meanwhile, USD/CAD is consolidating after climbing to 1.3950: the Canadian dollar found support amid the release of business activity data and fluctuations in oil prices, which remain a key driver for the pair.
Near-term moves in the major currency pairs will largely depend on the balance of the news flow and investor reaction to political uncertainty in the United States.
USD/JPY
At the end of September, dollar buyers in the USD/JPY pair almost managed to test the critical resistance level near 150.00. However, the slowdown in bullish momentum allowed dollar bears to seize the initiative, forming a bearish harami candlestick pattern on the daily timeframe. Technical analysis of USD/JPY suggests a potential continuation of the downward movement towards the key range of 146.00–146.50. Bulls, however, may attempt to push the pair back into the 147.90–148.20 zone.
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Hang Seng Index Hits 4-Year High
As the chart shows, Hong Kong’s Hang Seng Index (Hong Kong 50 on FXOpen) climbed above the 27,300 mark today – for the first time since summer 2021. The bullish momentum has been supported in part by corporate news. According to media reports:
→ Shares of Chinese EV maker NIO Inc. rose by around 5% following news that vehicle deliveries had increased by 64.1% year-on-year.
→ Shares of Ascletis Pharma Inc. jumped 12.8% after the company announced a share buyback programme.
→ Alibaba shares surged 4% after JPMorgan raised its price target by more than 40%, citing AI industry development and strong user engagement.
Since 1 September, the Hang Seng Index (Hong Kong 50 on FXOpen) has gained over 7%.
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Natural Gas Price Hits 2.5-Month High
As the XNG/USD chart shows today, natural gas prices have risen above $3.600/MMBtu for the first time since mid-July.
According to media reports, the rise in gas prices has been driven by:
→ Weather models forecasting colder conditions, suggesting the heating season may begin earlier than expected;
→ An EBW Analytics Group note highlighting short-covering activity in the market, which has accelerated the rally (a short squeeze effect).
At the same time, chart analysis suggests that the upside potential may be limited.
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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
