US Dollar Price Analysis – A Weaker USD Allows Risk Markets Room to Edge Higher

US Dollar Chart and Price Analysis (DXY)

  • US dollar weakness continues after Friday’s heavy post-NFP sell-off.
  • The greenback is near a notable support area.

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The US dollar is sliding lower at the start of the week, prolonging Friday’s sell-off, as risk markets pushed higher despite the lack of any confirmed, positive momentum. Equity markets are moving higher, the VIX is down, while gold is testing notable resistance despite high US Treasury yields. The 2-year UST is quoted at around 4.68%, while the 10-year term is 4.14%. All this risk-on enthusiasm comes despite the Fed raising rates by 75 basis points last Wednesday and warning that markets may not have fully priced in the central bank’s intentions to rein in inflation. nurse.

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Friday’s US Employment Reports (NFPs) were seen as a mixed bag with more jobs created than expected while the unemployment rate rose slightly more than forecast.


October jobs report: The economy added 261,000 payrolls. Next Place for US Dollar

An ongoing story driven behind the risk is the possibility of a return of covid sanctions in China. This story started about a week ago, causing Asian stock markets to jump, but was repeatedly denied by the Chinese government. Using a rumor originating in China as a reason to take risks is not a good idea.

On Thursday, the latest look at US inflation should provide markets with a clearer short-term direction, although this may be overshadowed by a series of Fed speakers this week, starting with Collins, Mester and Barkin today.

For all market-moving data releases and economic events, watch real-time DailyFX Calendar.

The daily USD chart shows Friday’s sell-off and slight decline seen since the September 28 high. USD is currently near the support zone between 109.30 and 110.30 that has been held. Hold several times to break lower. A confirmed break below here will pave the way for the 108 sub-level. The dollar is currently below both the 20 and 50-day moving averages, a neutral to negative setup.

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US Dollar Currency Index Daily Price Chart – Nov 7, 2022


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