CITIZENS COMPASS– The US Dollar Index (DXY), retreated on Friday after a brief move above the 100.00 level.
DXY measures the value of the US Dollar (USD) against other currencies.
Despite stronger-than-expected United States (US) Nonfarm Payrolls data, the Greenback is under pressure from dovish interpretations and emerging trade headlines involving China.
The US Bureau of Labor Statistics reported that Nonfarm Payrolls rose by 177,000 in April, surpassing the 130,000 consensus but lower than the revised 185,000 in March.
The Unemployment Rate remained at 4.2%, while the Labor Force Participation Rate rose slightly to 62.6% from 62.5% in March.
Average Hourly Earnings, a key gauge of wage inflation, increased by 3.8% year-over-year, unchanged from the prior month.
Downward revisions for February and March payrolls reduced the total jobs gain by 58,000, diluting the upside surprise from April.
China is reportedly open to tariff negotiations with the Trump administration, which pressured the US Dollar as traders anticipated progress.
The US signed a minor mineral deal with Ukraine, though it has limited economic scope and lacks any defense commitments.
Despite the NFP beat, market participants view April’s print as the last potentially strong labor report before softness emerges in June.
The Federal Reserve is still widely expected to cut rates in June, with traders pricing in over 100 basis points of easing by year-end.
Earlier this week, the ADP employment report showed private sector payrolls rose by just 62,000, the weakest since July 2024.
GDP for Q1 showed a 0.3% annualized contraction, driven by surging imports and weakening domestic demand ahead of tariffs.
The DXY is flashing an overall bearish signal, currently trading around 99.53 with a big decline on the day. The price is moving within a range of 99.40 to 100.33. The Relative Strength Index (RSI) stands at 40.14 and is neutral, while the Moving Average Convergence Divergence (MACD) is generating a mild buy signal, suggesting divergence. Both the Stochastic %K at 59.25 and the Ultimate Oscillator at 42.86 also indicate neutral momentum. The 20-day, 100-day, and 200-day Simple Moving Averages (SMAs) at 100.27, 105.45, and 104.42, respectively, along with the 10-day and 30-day Exponential Moving Averages (EMAs) at 99.70 and 101.15, are all producing bearish signals. Support is located at 99.41, while resistance levels are set at 99.70, 99.78, and 100.27.
—Forexfactory.com
