The US Dollar (USD) is trading sideways on Friday, awaiting the release of the Nonfarm Payrolls (NFP) report, which is expected to be the key economic event of the week.
Key Factors:
- NFP Data: The NFP report will provide insights into the US labor market and influence expectations for the Federal Reserve’s (Fed) interest rate outlook.
- Geopolitical Risks: The ongoing tensions in the Middle East continue to support the safe-haven appeal of the US Dollar.
- Fed Rate Expectations: The CME FedWatch Tool shows a 69.3% chance of a 25 basis point rate cut at the next Fed meeting.
Technical Analysis:
- Upward Breakout: The US Dollar Index (DXY) has broken out of its September trading range, with potential for further upside.
- Resistance Levels: The 55-day Simple Moving Average (SMA) at 102.05 is a key resistance level. Breaking above this level could lead to further gains, with potential targets at 103.18, 103.36, and 103.75.
- Downside Support: If the DXY falls back below 100.62, it could signal a potential downside move, with support levels at 100.16 and 99.58.
Overall Outlook:
The US Dollar is likely to remain volatile, influenced by the NFP data and other economic factors. The DXY’s recent breakout suggests a potential for further upside, but there are also risks of a pullback.
