US Dollar Index outlook: Dollar falls on disappointing US June NFP numbers
US Dollar Index
The US dollar fell across the board on Thursday, hit by disappointing US labor data, (June NFP 57K vs 114K f/c and downwardly revised May result to 129K from 172K) reflecting significantly weaker than expected job growth last month.
The dollar Index, which tracks performance of dollar against the basket of six major currencies, fell 0.6% in immediate reaction to economic data and hit the lowest level in two weeks.
Softer than expected June labor data provide temporary relief to the Fed and fade expectations for rate hike in July, amid recent hawkish shift in the central bank’s narrative, although bets for September’s rate hike remain high.
Fresh weakness undermined larger bulls on completion of bearish failure swing pattern on daily chart and violation of initial Fibo support at 100.58 (23.6% retracement of 97.44/101.55 rally) though close below the latter will be needed to verify signal.
However, technical picture on daily chart remains bullish, with south-turning momentum indicators, still holding well in the positive territory, showing more space for correction.
Dips should ideally find firm ground at 100 zone (psychological/Fibo 38.2% retracement / bull-channel support line) to keep larger bulls in play and mark a healthy correction ahead of fresh extension of larger uptrend.
Res: 100.96; 101.55; 102.00; 102.40.
Sup: 100.29; 100.00; 99.50; 99.24.
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
