- Summary:
- The US Dollar Index is on the front foot after US unemployment rate falls to 8.4%. It could aim for the 94.00 price level if it breaks the channel.
The US Dollar Index looks set to benefit from the Non-Farm Payrolls numbers, whose talking point is the larger-than-expected drop in the unemployment rate from 10.2% in July to 8.4% in August. The unemployment rate was less than the 9.8% forecast. Despite the lacklustre employment change of 1371K versus the expected number of 1375K (last number revised downwards to 1731K), the larger-than-expected drop in the unemployment rate was enough to put the US Dollar index on the front foot.
If things go they way they have gone today, this would be the 4th consecutive day of gains for the index, which has benefitted from bullish sentiment on the greenback all week long.
Technical Outlook for DXY
The USD Index is up 0.4% this Friday following the NFP data release and is now challenging resistance at 93.17. This resistance level also intersects the channel’s return line. A break above this border allows the DXY to aim for the 93.80 resistance, with 94.62 and 95.19 remaining valid resistance areas beyond the initial resistance.
On the flip side, a rejection at the 93.17 resistance could initiate a pullback towards the channel’s lower border. This move would bring the DXY into contact with the 92.50 price level, which may act as the initial barrier to any downside moves. 91.91 is the next support level that has to give way before price can attain the channel’s trendline.
Further price action on the DXY depends on the prevailing US Dollar sentiment at the time.
DXY Daily Chart
