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US Dollar Treads Water Post Jobs and Ahead of CPI. Where to for the DXY Index?

US Dollar Treads Water Post Jobs and Ahead of CPI. Where to for the DXY Index?


US Dollar, DXY Index, USD, US Jobs, Crude Oil, Gold, CPI, AUD/USD - Talking Points

  • The US Dollar is struggling to hold ground despite higher Treasury yields
  • Sentiment has improved on hopes of a soft landing for the US economy
  • The USD remains trapped in a range. Will the DXY index bounce?

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The US Dollar’s vulnerability has continued to start this week after sliding lower to close out last week. This is despite 253k non-farm US jobs being added in April, well above the 160k forecast and the revised 165k prior. The unemployment rate came in at 3.4% last month, the lowest level since 1969.

High beta risk assets such as the Aussie Dollar have seen modest gains so far today while EUR/USD and GBP/USD remain near the highs of 2023.

APAC equity indices are mostly higher after solid gains seen on Wall Street last Friday. Japan was the exception, returning after an extended holiday period and sinking into the red.

Futures markets are pointing toward a slightly soft start to the North American cash session at the time of going to print.

Treasury yields are mostly unchanged across the curve after ticking higher on Friday, mostly in the short end with the 2-year bond back above 3.92% after visiting 3.56% last month.

Crude oil and gold are both slightly higher with the WTI futures contract above US$ 71.50 bbl while the Brent contract is near US$75.50 bbl. Spot gold remains above US$ 2,020.

Looking ahead this week, the focus will be on US CPI and PPI on Wednesday and Thursday respectively after last week’s 25 basis point hike by the Fed.

The Australian government will be delivering its annual budget on Tuesday night local time when increases in the taxing of liquified natural gas (LNG) exports are expected.

After Germany’s industrial production data today, US wholesale inventory figures will be released. The full economic calendar can be viewed here.

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The DXY index is nearing the bottom end of the range after failing to overcome a descending trend line to the topside last week.

Support may lie among the recent lows in at 100.79 -101.13 area ahead of the April 2022 low at 99.57.

On the topside, resistance might be at the prior peaks of 102.40, 102.81 and 103.06. The 55-and 100-day simple moving averages (SMA) are currently near the latter two highs and may lend resistance.


Chart created in TradingView

--- Written by Daniel McCarthy, Strategist for

Please contact Daniel via @DanMcCarthyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.