US Dollar Index (DXY): Lower Ahead of Employment Data

New York (Mar 10)  The US Dollar Index (DXY) snapped a three-day winning streak on Thursday and is lower in today’s trading ahead of the release of February US Nonfarm Payroll data. DXY is currently trading at 101.84, down 0.19% from Thursday’s close.

The US dollar index appears to be reacting to a persistent overbought condition ahead of the employment data. However, a strong number would likely push the dollar higher despite the presence of an overbought condition.

And, given the ADP Employment Change data that was released on Wednesday, a strong number is possible. The ADP figure came in at 298K, well above consensus forecast for a reading at 180K.

On a move to the upside, resistance is at the most recent high at 102.26. This level was reached on March 2 and tested and held in yesterday’s trading, prior to the move to the downside.

A break above 102.26 would leave the target at the high established January 11 at 102.95. On a move above this level, the target becomes the high established January 3rd at 103.82.

Should DXY experience further weakness in today’s trading, support stands at the 20-day moving average, which comes in at 101.40 at present. This moving average has been tested and held as support on several occasions since mid-February.

Source: EconomicCalendar