Analysis of the Dollar Index after NFP Data

• 05 January, 2024 Ruchit Thakur

Analysis of the Dollar Index after NFP Data

Evening Update: Following the release of the NFP data, will the Dollar Index (DXY) increase more or reverse?

Last week, the Dollar Index (DXY) was trading around a crucial support level in the range of 100.50 to 100.80, and it recovered well from there. The Dollar Index found considerable support in this region, and the price duly acknowledged it before rising sharply beyond it. Earlier in February and May, the 100.50–100.80 zone was a strong support, and DXY rebounded nicely from there, moving into the 106.50-107.00 zone.

• The 100.50-100.80 level is a strong support zone for DXY.
• We might anticipate a bounce in DXY into the 103.50-104 region based on the chart. 
• The chart indicates a potential triple bottom in the region of 100.50–100.80, and the DXY indicates a up move after testing this crucial support. 

Please view the important support zone on the chart described above. Bulls in the Dollar Index brilliantly guarded the 100.50–100.80 area, and the price surged. The Dollar Index appears to be moving more or less sideways within a broad band of 100.50 to 105.50, as we have observed in 2023. In early 2024, the Dollar Index might show signs of strength if it can regain the 103.00–103.50 region. In the near future, DXY might move towards the 105.50-106 zone.

Dollar bulls were bolstered by the NFP data, which caused the index to rise sharply from the 102.50 to 103 zone. Nonfarm Payrolls, which do not include employees in the farming sector, track changes in the number of individuals employed during the previous month. Since the Federal Reserve has full employment as one of its goals, it is closely monitored. 

A result that exceeds expectations is usually positive (bullish) for the USD, whilst a reading that falls short of expectations is typically negative (bearish).

Please check the support and resistance level of Dollar Index (DXY) on the weekly chart. All levels are in spot chart :