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- The DXY Dollar index extended losses to the 92.00 level.
- Dismal US NFP data weighed on the index and kept the pressure going.
- The Fed’s tapering plan and the Delta variant spread in the US may continue to guide the index.
The weekly forecast for the DXY Dollar Index is bearish and may aim for the 91.50 level. However, a technical upside retracement can be seen, too.
The DXY remains broadly in a bearish trend around the 92.00 area as the week ends. If another surge in the Delta variant is seen in the US, it may dampen the greenback across the board. However, in the absence of any key data event, the risk jitters and COVID-19 related headlines will be crucial to the price action in the index.
The US dollar index (DXY) fell around 92.00 on Friday due to selling pressure around the dollar.
The US Dollar Index Remains Low, Around 92.00
After the number of nonfarm jobs fell unexpectedly in August, the index returned to its downtrend and briefly approached the 92.00 level on Friday. Despite the market consensus of 750,000 jobs being created, the US economy created 235,000 jobs last month. In addition, the number of jobs increased to 1,053 million in July (up from 943 thousand in June).
Despite the decrease in the unemployment rate, the average hourly wage increased 0.6% between months and 4.3% annually, exceeding previous estimates in both instances. While participation stayed at 61.7%, it remained unchanged from the last year.
Contrary to the DXY pullback, the 10-year benchmark yields rebounded to 1.33%, having broken above the daily consolidation topic around 1.30%. The Fed will likely not announce its asset purchase tapering plan at its meeting in September, which means market participants will probably report it in November or December.
Delta Variant in The US
There was an average of 163,600 coronavirus cases per day in the United States over the past week, increasing 12% from two weeks ago. A total of 40 million cases is likely to be reported within days.
More coronavirus cases were reported in Oregon, Kentucky, and Guam in the past week than in any other seven-day period. In addition, the past week has been the deadliest for coronavirus in Florida.
A total of 101,500 patients have been hospitalized with coronavirus, with more than 15,500 admitted to Florida hospitals, where hospital admissions are much higher than anywhere else in the country. On Monday, Kentucky’s unemployment rate was at its highest level in a year.
Key events from the US during the Week of Sept. 6 – 10
The important upcoming events include the JOLTS jobs opening data due on Wednesday ahead of Fed William’s speech in the US. Moreover, weekly unemployment claims are also significant to note. Other than that, US PPI month-over-month data may also trigger volatility on Friday. The figure is expected to slide to 0.6% against the previous month’s reading at 1.0%.
DXY Dollar Index Weekly Forecast – Daily Chart
DXY Dollar Index Weekly Technical Forecast: Probability of Upside Retracement
The DXY price has been dropping since Aug. 20 (nine-month top) and seems to have taken a pause near the 92.00 area. Friday’s down bar shows the probability of an upside retracement. However, the 50- and 20-DMAs are pointing down, and the index may test the 100- and 200-DMAs in the 91.30 – 50 zone.
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