US Dollar Index Turns Around 94.00 After NFP Report

• The DXY quickly faded the initial optimism and fell below 94.00.
• The US economy added 194,000 jobs in September compared to an expected 500,000.
• The US unemployment rate fell to 4.8% (from 5.2%).

The US Dollar Index (DXY), which measures the dollar against a set of its main rival currencies, retakes the 94.00 barrier after a short-lived test of the 93.90 area.

US dollar index cut earnings after payroll

The index is now losing ground for the second consecutive session after disappointing payroll figures forced the dollar to fade from the previous advance and caused US yields to also decline modestly.

In fact, the dollar plunged into negative territory after nonfarm payroll figures showed the economy added 194,000 jobs last month, well below the 500,000 expected. On a more optimistic side, the unemployment rate improved to 4.8% (from 5.2%).

Additional data saw the Participation Rate at 61.6% (from 61.7%) and Average Hourly Earnings expanding to 0.6% and 4.6% per month over the prior year.

Despite not reaching a consensus, it is unlikely that the September payrolls will deter speculation of a gradual reduction in QE sooner rather than later. The pace of job creation may have lost some traction, but it remains on track, while inflation has far exceeded the “gradual reduction threshold”.

Technical levels

Now the index is losing 0.08% at 94.12 and a break above 94.50 (September 30, 2021 high) would open the door to 94.74 (September 25, 2020 monthly high) and then 94.76 (200 SMA). weeks). On the other hand, the next bearish barrier emerges at 93.67 (weekly low of October 4) followed by 93.51 (20-day SMA) and finally 92.98 (weekly low of September 23).