- The DXY briefly broke the support at 92.00 after payrolls.
- US 10-year yields bounce to daily highs near 1.33%.
- The US economy added “only” 235,000 jobs in August.
Selling pressure continues to dictate price action around the dollar and now relegates to the US dollar index (DXY) to the 92.00 zone on Friday.
The US dollar index remains depressed around 92.00
The index accelerates the downtrend and briefly tests the area below 92.00 on Friday after non-farm payrolls surprised (largely) to the downside in August. In fact, the US economy added 235,000 jobs last month, well below the 750,000 jobs expected by the market consensus. The July figure was revised up to 1.053 million jobs (from 943,000).
On the upside, the unemployment rate fell to 5.2% and Average Hourly Income gained 0.6% month-on-month and 4.3% on an annualized basis, all impressions improving on previous estimates. The Participation Rate, on the other hand, remained unchanged at 61.7%.
The pullback in DXY contrasts with the rally in US 10-year benchmark yields to the 1.33% zone, breaking above the daily consolidation range near 1.30%.
The chances that the Fed could announce the start of the downsizing process at its September event have now been affected, at the same time that market participants could start writing a likely announcement at the November or December meetings.
Other US data showed that the US ISM services PMI index has fallen to 61.7 in August after hitting 64.1 in July, its all-time high. The result has exceeded the 61.5 points expected by the market.
Relevant levels
Now, the index is losing 0.20% at 92.02 and faces the next support at 91.94 (September 3 monthly low) followed by 91.78 (July 30 monthly low) and finally 91.62 (100-day SMA). On the other hand, a break above 92.51 (55-day SMA) would open the door to 93.18 (August 27 high) and then 93.72 (August 20, 2021 high).
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