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US Dollar Index clings to gains near 96.30 ahead of NFP, Powell

  • The index trades with small gains near 96.30 on Friday.
  • Yields of the US 10-year note fall to fresh lows near 2.50%.
  • US Non-farm Payrolls, Powell’s speech next of relevance.

The greenback, in terms of the US Dollar Index (DXY), is recovering part of he ground lost on Thursday and trades within a narrow range near 96.30 ahead of key events in the US docket.

US Dollar Index looks to data, Powell

The index has started the year on a choppy note so far, always looking to the broad risk appetite trends as the main drivers of the price action in the global markets.

A moderate sell off hit the buck yesterday amidst the continuation of the risk-off trade. In addition, the greenback suffered a poor result from the ISM Manufacturing, which dropped to 54.1 for the month of December, missing expectations at the same time.

In the data space, the always-critical US labour market report is due later in the NA session followed by the speech by Chief J.Powell at the American Economic Association annual meeting.

What to look for around USD

The index has faded the spike to the boundaries of the 97.00 handle earlier in the week, allowing for some consolidation in the near term and prompting for caution ahead of today’s US calendar. In the meantime, another battlefront appears to have opened for President Trump as a ‘renewed’ House Democrats challenged him on the current shutdown. Further out, the US-China trade effervescence eased somewhat as both parties are expected to meet at some point over the weekend. The issue gathered extra pace as of late after computer giant Apple Inc. recently announced it expects its sales of the iPhone in China to slowdown.

US Dollar Index relevant levels

As of writing the index gains 0.04% at 96.32 facing the next resistance at 96.75 (21-day SMA) followed by 96.95 (high Jan.2) and then 97.54 (high Nov.28 2018). On the flip side, a break below 95.99 (100-day SMA) would open the door to 95.82 (low Jan.2) and finally 95.65 (low Jan.1).

FX option expiries for Jan 4 NY cut

FX option expiries for Jan 4 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1350 953m 1.1375 546m 1.1430 7
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