Today’s weakness in the greenback is playing a bearish note on the USD Index, as it extends its downside move towards 2-month lows. The Non-Farm Payrolls report of today showed an employment change which beat expectations but did not match the figures for September. Further, the number of long-term unemployed people tripled from 1.2 million to 3.6 million people. This showed that the recovery of the labor sector in the US continues to face stiff headwinds.
Today’s NFP data did nothing to slow down sellers of the greenback, and this has been reinforced on the DXY. Markets have also started to warm up to the possibility of a Joe Biden presidency; a situation which maintains pressure on the US Dollar. However, the incumbent President, who now trails in Georgia and Pennsylvania, has vowed to challenge the results in court.
Technical Levels to Watch
Presently, the US Dollar index is down by 0.33% and looks to end the week lower. Today’s candle has breached the support at 92.50, following the breakdown and invalidation of the evolving rounding bottom pattern. Price now dips perilously close towards the 92.00 psychological support, leaving this area as the only barrier between the current price and the 91.906 support last seen two months ago.
On the flip side, recovery has to come from a possible bounce on the 92.00 psychological support, allowing 92.50 and 93.173 to come into play as possible resistance targets. The outcome of the US election remains the fundamental trigger for the DXY, heading into next week.
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DXY Daily Chart
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