We have been arguing for a long time that the 115.00 level remains the separating line between dollar rally and dollar failure. Tomorrow the market will get to test that thesis as the market get ready for FOMC day.

Last Friday’s Non-Farm Payrolls confirmed the US growth continues unabated. The economy generated 235,000 jobs versus forecasts of 196,000. Even the unemployment rate declined for the right reasons as more individuals sought jobs rather than abandon the workforce. Although wage growth was slightly tepid at 0.2% versus 0.3%, it still remains on pace to grow at more than 2% this year.

All of this data should make traders confident about US yields and the prospects for the buck going forward. Yet despite the robust economic numbers, the greenback quickly gave back its gains and managed to close below the key 115.00 level against the Japanese yen on Friday.

That has been the story since the start of this year. No matter how good US data appears to be, no matter how hawkish the Fed, the dollar rally fizzles out very quickly.

Tomorrow that may change if Janet Yellen signals that the Fed is prepared to make 4 rate hikes rather than 3. It’s difficult to see how the greenback would not rally off that news. One hundred basis points of yield would give the buck a huge premium on the yen and would attract carry traders looking to finally make some return. Technically the breakout above the 116.00 level will be key and could be spark of a fresh dollar rally.

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