- DXY extends the slide to multi-week lows near 92.20.
- US non-farm payrolls reached 638,000 in October.
- The US unemployment rate decreased to 6.9% (from 7.9%).
The dollar remains submerged in a red sea and is trading at new 2-month lows in the 92.20 region when tracked by the US Dollar Index (DXY).
The US dollar index attentive to the US elections
The index was doing well on the defensive for another session, although it managed to rebound away from multi-week lows in the 92.25 / 20 zone against the background of strong broad-based sentiment in global markets.
In fact, the dollar is exacerbating its decline in response to markets’ perception that Democratic candidate Joe Biden could win the US election. So far, Biden remains in the lead with 253 electoral votes and according to the latest news, he is also winning the key states of Georgia and Pennsylvania.
In the space associated with the US data, non-farm payrolls, always critical, showed that the economy added 638,000 jobs during October and the unemployment rate fell to 6.9%.
What to look for around USD
The index falls further and navigates 2-month lows around 92.20 amid a growing improvement in the risk space. Meanwhile, the increasing likelihood of a Biden presidency continues to weigh on the dollar, although the prospects for a “blue wave” appear to have largely diminished by now. From a more macro point of view, the impact of the second wave of the pandemic on the global economy could favor the occasional resurgence of risk aversion and therefore lend some support to the dollar. No news from the Fed leaves the “down any longer” stance unchanged.
Technical levels
At the moment, the index is shedding 0.16% to 92.37 and faces immediate contention at 92.22 (November 6 monthly low) followed by 91.92 (23.6% Fibonacci from the 2017-2018 drop) and then 91.80 (monthly low of May 2018). On the other hand, a breakout of 94.08 (100-day SMA) would open the door to 94.30 (November 3 monthly high) and finally 94.74 (September 25 monthly high).
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Credits: Forex Street
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