- DXY found some selling bias after hitting fresh 19-year highs.
- US nonfarm payrolls increased by 428,000 jobs in April.
- The unemployment rate was unchanged at 3.6% last month.
The US dollar index (DXY), which tracks the dollar against a basket of key rival currencies, now alternates gains with losses at 103.50 on Friday.
Listless US Dollar Index After Upbeat NFP Report
After posting new highs in the area last seen in late December 2002, just past the 104.00 hurdle, the index found some selling pressure and pulled back to the 103.20/15 band against the backdrop of the mixed performance of the US returns.
The pullback in the index came despite the US economy adding 428,000 jobs during April, according to the latest payroll figures. In addition, the Unemployment Rate remained at 3.6%, the Average Hourly Wage expanded slightly below expectations vs. the previous month and the Participation Rate was corrected slightly lower to 62.2%.
What to look for around USD
The dollar regained its strong appeal and managed to post fresh highs just above 104.00, or new 19-year highs, as investor expectations of a tighter rate path from the Fed have been bolstered by the FOMC event on Wednesday. The dollar’s constructive stance is also supported by the current narrative of high inflation and strong labor market health, as well as bouts of geopolitical tensions and higher US yields.
Technical levels
Now, the index is losing 0.05% at 103.49 and the break of 104.06 (high May 6, 2022) would open the door to 105.00 (round level) and finally 105.63 (high Dec 11, 2002). On the other hand, next support emerges at 102.35 (low May 5) followed by 99.81 (weekly low Apr 21) and then 99.57 (weekly low Apr 14).
Source: Fx Street
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