- DXY trended higher toward 106.00 on Friday.
- November’s NFP report showed a large beat on job creation.
- Sentiment data from December came in strong.
The US Dollar Index (DXY), which measures the value of the USD against a basket of currencies, gained toward 106.00 on Friday, driven by several key movers. The US Dollar remained flat after the release of Nonfarm Payrolls (NFP) data, while markets anticipated a potential December rate cut by the Federal Reserve (Fed).
The DXY found support at 105.50 and advanced toward 106.00 amidst this news. As a result of anticipation of a rate cut, a dovish stance from the Fed would, in general, cause a decline in the DXY. However, the market is leading to strength in the US Dollar despite this news.
Daily digest market movers: US Dollar sees some gains after NFP data
- The US Dollar Index advanced toward 106.00 as several key factors influenced its movement.
- The NFP surged by a noteworthy 227,000 in November, far exceeding market expectations of 200,000.
- The Unemployment Rate experienced a slight uptick to 4.2% in November.
- Monthly Average Hourly Earnings posted a steady 0.4% gain, meeting the previous month’s reading.
- Consumer Sentiment climbed to 74 in December, surpassing market projections.
- The University of Michigan’s 5-year Inflation Expectations rate declined to 3.1%.
DXY technical outlook: Bulls fights back, holds 106.00 level
The DXY halted its descent and gained ground today, indicating resilience. This move comes despite profit-taking activity. The index is currently aiming to recover its 20-day Simple Moving Average (SMA), and as long as it remains below there, it could exacerbate its short-term difficulties.
On the other hand, the bullish trend for the DXY remains robust, with resistance points located at 106.50 and 107.00. Support is anticipated within 105.50 to 106.00.
