US Dollar Index (DXY) extends recovery to 101.80 ahead of US NFP report
- DXY builds on Thursday’s recovery from late September lows amid rebounding US bond yields.
- Oil-driven inflation fears keep Fed hike bets on the table, supporting bond yields and the USD.
- Hopes for an end to the Iran war warrant caution for bulls ahead of the crucial US NFP report.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, gains some follow-through positive traction during the Asian session on Friday, recovering further from its lowest level since late September set the previous day. The index advances to the 101.80 area in the last hour, though it sticks to modest weekly losses as traders look to the crucial US monthly employment details for a fresh impetus.
The popularly known US Nonfarm Payrolls (NFP) report is anticipated to show that the economy added 65K new jobs in October, up from the previous month's softer reading of 29K. Meanwhile, the Unemployment Rate is forecast to hold steady at 4.2%. Apart from this, investors will pay close attention to Average Hourly Earnings, as wage growth pressures could heavily influence Federal Reserve (Fed) policy expectations and drive demand for the US Dollar (USD).
Heading into the key data risk, a sharp overnight recovery in crude oil prices reignited inflationary concerns. Moreover, traders are still pricing in around a 70% chance that the US central bank will raise borrowing costs again in December. This, in turn, triggers a modest bounce in US bond yields following the mid-week slump sparked by the US midterm elections and supports the DXY. Moreover, geopolitical uncertainties back the case for further gains for the safe-haven USD.
President Donald Trump said on Thursday that the US may have to destroy the rest of Iran and added that people will know soon enough if he acts. Moreover, the US and Iran remain divided over Tehran's nuclear program and the Strait of Hormuz. However, top Senate Democrat Chuck Schumer vowed on Wednesday to push for an end to the Iran war, making it prudent to wait for strong follow-through buying before confirming a near-term bottom for the DXY.
DXY 1-hour chart
Technical Analysis
The DXY retains a mildly bullish bias above the 100-hour Exponential Moving Average (EMA) at 101.62. The index has also reclaimed the 38.2% Fibonacci retracement at 101.69, which now reinforces underlying demand. Further up, immediate resistance appears at the 50.0% retracement near 101.84, followed by the 61.8% level at 101.99 and the 78.6% retracement at 102.21 ahead of the recent cycle high area at 102.49.
On the downside, initial support is seen at the reclaimed 38.2% retracement at 101.69, ahead of the 100-period EMA at 101.62, with deeper support at the 23.6% Fibo. level at 101.50 and the structural floor at 101.20.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.19% | 0.14% | 0.08% | 0.21% | 0.49% | 0.58% | 0.00% | |
| EUR | -0.19% | -0.06% | -0.11% | 0.03% | 0.29% | 0.39% | -0.19% | |
| GBP | -0.14% | 0.06% | -0.04% | 0.08% | 0.35% | 0.45% | -0.13% | |
| JPY | -0.08% | 0.11% | 0.04% | 0.15% | 0.41% | 0.50% | -0.07% | |
| CAD | -0.21% | -0.03% | -0.08% | -0.15% | 0.27% | 0.36% | -0.21% | |
| AUD | -0.49% | -0.29% | -0.35% | -0.41% | -0.27% | 0.09% | -0.48% | |
| NZD | -0.58% | -0.39% | -0.45% | -0.50% | -0.36% | -0.09% | -0.56% | |
| CHF | -0.01% | 0.19% | 0.13% | 0.07% | 0.21% | 0.48% | 0.56% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
