Monday, June 6, 2016
DXY – Dollar Index Showed Weary Before Employment Report
Even before Friday’s decline, the dollar showed lost bullish momentum. The dollar index (DXY) fell 1.6% on Friday following the news that the number of new jobs added in May was at the lowest since September 2010. Volatility in that number aside, the step down in the employment report clearly took the prospect for a June rate hike off the table.
The dollar advanced 4.4% from the May 3, 91.919 low to the May 30th high at 95.968. Along the way, DXY collected 13 new highs without a 3 session pause until last Thursday when it failed to make a new high. Otherwise, no particularly telling reversal signals were evidenced as the index moved toward the late March high.
Over the next three sessions, we will get a sense of the significance of the single session decline. Unless DXY can recover to settle above 94.785 by Wednesday, chances are the early-May low will be retested soon.
Support: 93.823; 93.082; 92626; 91.378
Resistance: 94.785; 95.168; 95.891; 96.633