USD Softens On NFP Miss, CPI Due Next

NFP Undershoots ForecastsThe US Dollar came under heavy selling pressure on Friday as the latest round of US employment indicators gave a mixed view of the US jobs market. The headline NFP figure was seen undershooting forecasts at 187k vs 205k expected, the prior figure was also revised lower to 187k from above 220k initially. Despite the lower number, the unemployment rate was seen moving lower to 3.5% from 3.6% prior while average hourly earnings were seen rising slightly to 0.4% from 0.3% prior.Despite the lift in wages and the drop in the unemployment rate, the data is generally consistent with the view that the Fed won’t be hiking again this year. Given the miss on the headline NFP reading alongside the recent inflation decline, this should be enough to keep the Fed sidelined.US CPI On WatchThe main focus this week will therefore be on the next US CPI reading due on Thursday. Provided that inflation is seen to have moved lower again, this should keep USD pressured on reduced Fed rate-hike expectations. However, if we see any surprise upside, this will no doubt fuel a swift repricing, leading USD higher on the increased likelihood of a further hike before year end.Technical ViewsDollar IndexFor now, the recovery rally off the 99.46 lows has stalled into a test of the bear channel highs. While above 101.22, the outlook remains bullish however, with 103.48 the next topside level to note. Above there, 104.95 comes into view as higher resistance. To the downside, any drop back below the 101.22 level will turn focus back to support at 99.46 next.