FOREX: USD Index Rises 0.5% Following ‘Solid’ Jobs Report

• Treasury futures are holding near midmorning highs ahead of the FOMC policy announcement at the top of the hour, curves running flatter with 2s underperforming: 2s10s -2.819 at 47.954.
• Tsy Jun'25 10Y futures currently +5 at 111-15 vs. 111-15.5 high, still well below initial technical resistance at 112-01.5 (High May 2). Support at 110-27.5 Low May 6 -- a clear break of this average would strengthen a bearish threat and expose 110-16+, Apr 22 low.
• Projected rate cut pricing looks steady to mildly lower vs. morning levels (*) as follows: May'25 steady at -0.5bp, Jun'25 at -7.3bp (-8.2bp), Jul'25 at -22.8bp (-23.8bp), Sep'25 -42.5bp (-43.8bp). That said, markets are still pricing in three 25bp cuts by year end.
• Stocks are off lows, the DJIA still outperforming (+375.0 at 41,204.2) after trading weaker the last couple sessions, SPX eminis +24.50 at 5650.25, Nasdaq has pared losses trades +1.30 at 17,690.96.
• Bbg US$ index firmer, inside session range (BBDXY +3.54 at 1219.88), Gold weaker (-46.16 at 3385.62), Crude weaker (WTI -0.70 at 58.39).

• RES 4: 1.3605 1.236 proj of the Feb 28 - Apr 3 - 7 price swing 
• RES 3: 1.3550 High Feb 24 ‘22 
• RES 2: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing 
• RES 1: 1.3444 High Apr 28 / 29 and the bull trigger  
• PRICE: 1.3346 @ 16:34 BST May 7
• SUP 1: 1.3257 Low May 5   
• SUP 2: 1.3245 20-day EMA
• SUP 3: 1.3041/3058 Low Apr 14 / 50-day EMA 
• SUP 4: 1.2968 Low Apr 11 

Recent weakness in GBPUSD appears corrective and the pair continues to trade inside a range with support at 1.3245, the 20-day EMA, intact.  A clear break of this average would signal scope for a deeper retracement. Note that moving average studies remain in a bull-mode position, signalling a dominant underlying uptrend. A resumption of gains would open 1.3510, a Fibonacci projection. 

Silver Bulletin has published a new detailed breakdown of President Trump's polling performance, noting that the economy is now a “liability” for the administration, despite a stabilisation of his approval. 

• Silver notes: “As you can see, the issue approval pattern from Trump’s first term — when the economy was generally his strongest issue, but he was often fighting losing battles on the “culture wars” — has somewhat reversed. This time around, immigration is one of Trump’s least bad topics, although his numbers have nevertheless declined. However, the economy is a considerably bigger liability.”
• Silver adds: “Still, there’s been a slight rebound in Trump’s numbers over the past week. Might that be because he’s struck a more conciliatory tone on tariffs? The stock market has liked the change in vibes and maybe that’s improving voters’ mood, too. (We suspect that some voters may be relatively sensitive to stock prices.) That’s what this sort of data can help discern. As you can see in the chart, there’s been an uptick in his ratings on trade. And his economic approval has stabilized over the past couple of weeks.”

Figure 1: Trump Approval Rating 

Source: Silver Bulletin