US Dollar Index remains firm above 100.00 ahead of NFP

The greenback is looking to add to Thursday’s gains and stays bid above the key 100.00 barrier when tracked by the US Dollar Index (DXY).

US Dollar Index focused on data, coronavirus

The index is posting gains for the third session in a row on Friday, managing to extend the upside momentum beyond the key barrier at 100.00 the figure and record at the same time fresh multi-day highs.

In the meantime, the developments around the coronavirus and its impact on the economy remains in centre stage and gained extra attention on Thursday after the Initial Claims rose by a shocking 6.65 million during last week, showing that more than 10 million US citizens filed for unemployment benefits in the last couple of weeks.

By the same token, the dollar’s momentum is also underpinned by safe haven demand and increasing weakness in its rival currencies like the euro and the British pound.

Later in the session, the focus of attention will be on the monthly labour market report, where Non-farm Payrolls are expected to drop by around 100K jobs and the jobless rate is seen ticking higher to 3.8% in March. However, the significance of the report has dwindled as of late and would be largely anticipated by market participants, as these figures will not show the sharp deterioration of the labour market experienced since the second half of the month of March.

Still in the US, the key ISM Non-Manufacturing will also be in the limelight later in the NA session.

What to look for around USD

DXY has regained the upper hand so far this week after bottoming out in the 98.30 region in past sessions, managing to retake the key 100.00 barrier and above amidst firm safe haven demand. Indeed, market participants seem to prefer the dollar vs. other safe havens like the Japanese yen and the Swiss franc in a context of prevailing risk aversion, all in response to unabated concerns surrounding the coronavirus and its impact on the economy. Further support for the buck comes from its status of “global reserve currency” and store of value.

US Dollar Index relevant levels

At the moment, the index is gaining 0.12% at 100.23 and a breakout of 100.41 (weekly/monthly high Apr.2) would open the door to 100.49 (78.6% Fibo retracement of the 2017-2018 drop) and finally 102.99 (2020 high Mar.20). On the other hand, the next support emerges at 98.27 (weekly low Mar.27) seconded by 98.07 (200-day SMA) and then 97.87 (61.8% Fibo retracement of the 2017-2018 drop).