It’s non-farm payrolls (NFP) Friday so that you know we gotta take a look at the U.S. greenback!

At the moment we’re taking a better take a look at the U.S. greenback index (DXY).

Are you seeing the pattern pullback that I’m seeing?

U.S. Greenback Index (DXY): 1-hour

U.S. Greenback Index (DXY) 1-Hour Foreign exchange Chart by TradingView

In case you had been too busy minding your shares or crypto trades, it’s best to know that the U.S. greenback is having a killer week after Fed Chairman Powell all however mentioned that the Fed gang is eyeing greater rates of interest than what markets have already priced in AND that they’ll probably maintain charges greater for longer.

Not surprisingly, DXY jumped on the information. The index was hanging out across the 104.20 ranges earlier than Powell’s testimony shot all of it the best way as much as the 105.90 intraweek highs.

A little bit of profit-taking and risk-taking dragged the safe-haven index again right down to its present 105.20 zone that will simply function an entry level for pattern merchants.

See, 105.20 is true in the course of an ascending channel that’s been round since mid-February. Not solely that, however the space additionally marks a earlier resistance zone AND the 38.2% Fibonacci retracement of this week’s upswing.

The cherry on prime of the candy setup is that 105.20 is true on prime of the 1-hour chart’s 100 and 200 SMAs.

Assume DXY will lengthen its uptrend in the present day?

Markets anticipate Uncle Sam so as to add a internet of 200K jobs in February, a lot lower than the 517K addition that we noticed in January.

However word that the NFP headline determine has shocked to the upside for a whopping 10 months in a row now, and 12 out of the final 13 months.

This week’s ADP and JOLTS jobs releases additionally help one other robust quantity that can probably give the Fed extra confidence to lift its rates of interest even greater.

If in the present day’s NFP occasion helps the Fed’s higher-for-longer narrative, then DXY might bounce to to its intraweek highs close to the 106.00 psychological deal with.

But when in the present day’s launch seems to be a non-starter, or if markets deal with profit-taking from their USD positive aspects, then DXY might revisit decrease inflection factors like 104.60 or 104.20.

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