US Nonfarm Payrolls Exceed Expectations in October

Strong nonfarm payrolls data is supportive for the DXY in the short term; expectations that the Fed may delay rate cuts could push the dollar higher. However, RSI14 at 81.8 is in overbought territory and the price is significantly above SMA20/SMA50, which suggests the upward move may be limited and increases the risk of profit-taking. MACD is slightly above the signal line, momentum is positive but weak. A slight upward bias is possible for 1-3 days, but due to overbought conditions, the rally is expected to be limited and choppy.

Strong nonfarm payrolls data could dampen risk appetite by reducing expectations for Federal Reserve rate cuts. However, SPX has already fallen 3.3% on the day and its RSI at 24 places it in oversold territory, which raises the likelihood of limited bargain buying. MACD is below its signal line and the price is clearly below SMA20/SMA50, indicating a short-term downtrend. The surprise effect of the data may be partly priced in, so confidence in further downside is moderate. A choppy but slightly negative course is expected over the next 1-3 days.