Dollar Index: US Dollar gathering momentum towards a breakout, NFP awaits on Friday

• The US Dollar Index is range bound at the 90.00 level. 
• The US Non-Farm Payrolls on Friday expected is expected to come out at 200K. 

DXY Daily chart 

The Dollar Index is trading around 90.00 after having tested the key resistance level of 93.00 on Thursday. Back then, Fed Chair Jerome Powell seemed less hawkish than he was a few days earlier, in the first part of his testimony before Congress. 

The major market mover for the greenback this week is most likely the United States Non-Farm Payrolls at 13.30 GMT. It is expected to come out at 200K. The week will be full of macro data with Tuesday’s Factory orders at 15.00 GMT. Wednesday will see the ADP Employment change at 13.15 GMT and the Trade balance and Labor cost figures at 13.30. Thursday’s Initial and Continuing Jobless Claims data will be released at 13:30.

Detrimental to the Dollar is Donald Trump, speaking about imposing tariffs on stell and aluminum including on close allies and trade partners. The US Dollar fell alongside US bond yields when the news broke on Thursday and the greenback extended its falls later on.

Earlier today, the US ISM Non-manufacturing came in at 59.5 for the month of February vs. 58.9 expected although slightly lower than January’s 59.9. The news had no major influence on the DXY which kept trading all day so far in the 89.97-90.17 range. 

DXY 4-hour chart:

The DXY has retraced lower after finding resistance at the 91.00 level which is a previous cyclical low and a 32.8% Fibonacci retracement level as seen on the daily chart. On the 4-hour chart, the greenback is sitting just above the 100 and 200 SMA and 38.2% Fibonacci retracement level. The next resistance to the upside is seen at 90.33 with the 23.6% Fibonacci retracement level and at 91.94 which is the last cyclical high.

To the downside, intraday support is seen at the 89.80 with the 32.8% Fibonacci retracement and the 100 and 200 SMA. Not far below is the 89.62 with the 50% Fibonacci retracement closely followed by the 61.8% Fibonacci retracement with the 89.31 level. A clear break of this level can open the door down to the cyclical low at 88.24.