Technical Bias: Neutral
Key Takeaways
- US dollar eyes Nonfarm Payrolls for the next move, as all major pairs consolidate recent losses.
- US dollar index is around a critical level, which might result in a short-term pullback.
- US dollar index support seen at 80.85 and resistance ahead at 81.60.
The US dollar recently jumped higher against most of its counterparts, including the Euro and the British pound. However, it is approaching a major barrier where sellers might appear to protect further upside moving ahead.
RSI Divergence
There is a major RSI divergence forming on the weekly chart for the US dollar index, which if takes shape can result in a pullback in the US dollar. Moreover, there is a trend line on the weekly timeframe, which is almost coinciding with the 50% Fibonacci retracement level of the last major drop from the 84.74 high to 78.93 low. The US dollar index recently stalled right around the trend line mentioned, but one cannot deny a final push towards the 50% fib level before a substantial pullback takes shape. If somehow it breaks the trend line and the 50% fib level, then it would call for more gains towards the 61.8% fib level, which means the EURUSD pair could fall towards the 1.3300-1.3280 support area.
Alternatively, if fails to break higher, then a move lower might take the US dollar index towards the 100 weekly simple moving average, which is currently around the 80.85 level. The 81.50-60 resistance zone is very crucial, as it has acted as a pivot area numerous times.
US Nonfarm Payrolls And Unemployment Rate
The US Nonfarm Payrolls and the unemployment rate data will be published later during the New York session. The forecast is of yet another 200K+ reading and the unemployment rate to remain at 6.1%. If there is any major miss, then the mentioned scenario might happen, and we could witness swing moves later today.
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