- It has been a difficult end for the US dollar.
- After the soft NFP data, the DXY has fallen to the key level of 91.00.
It has been a difficult end to what would otherwise have been an excellent week for the US dollar; Having started the week just above 90.50, the Dollar Index (DXY) it had risen to 91.60 at the start of the Asia Pacific session on Friday, a rally of more than 1% at the time. Since the bearish January labor market report on Friday, half of these gains for the week are gone, and the DXY is weak, just above the 91.00 level.
In the short term, a lot could depend on whether the DXY can stay above 91.00 between now and the close of the forex market on Friday at 22:00 GMT; A close below could be seen as a bearish sign that could embolden some of the long-term USD bears to add to their short positions, which could further affect the currency at the beginning of next week. If DXY sustains above 91.00 (as it appears it will currently do), this could be seen as “confirmation” that this week’s rally has not been just a dead cat bounce or short covering move, and in could actually be “for real”. In which case, a pullback to this week’s highs above 91.50 would appear likely over the course of next week.
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