The US dollar (USD) made a recovery after three days of declines, with the US dollar index (DXY) registering a 0.3% increase, now around 101.40.
This rebound comes as investors show caution ahead of the June non-farm payrolls (NFP) data set to be released on Thursday.
Market participants are keenly awaiting the job report, which is projected to indicate that the economy added 110,000 jobs in June, a drop from 172,000 in May. The unemployment rate is expected to hold steady at 4.3%.
There’s an approximately 80% likelihood that the Federal Reserve will consider raising interest rates at least once this year, based on insights from the CME FedWatch tool.
In Tuesday’s trading, attention will also be on the May US JOLTS jobs report, anticipated at 14:00 GMT. Analysts expect employers to report 7.3 million new job openings, down from the previous month’s 7.618 million.
Technical outlook for the US dollar index
As of now, the dollar index is trading approximately at 101.41. The short-term sentiment appears positive, with prices above the 20-period exponential moving average (EMA) of 100.56, indicating a bullish trend following a recent rise. The Relative Strength Index (RSI) is just shy of overbought territory at 67.83, hinting at considerable upward momentum as the index maintains its position near recent highs.
In terms of support, immediate backing can be found around the 20-day EMA at 100.56, safeguarding the latest breakout area and reinforcing a positive outlook while the price stays above this level. To the upside, a significant resistance zone lies around the 102.00 mark, with potential for movement towards 103.00.
