The US jobs report points to a tight labor market, US Treasury yields are expected on Monday
Friday’s US jobs report showed the US added 236k jobs in March, close to the consensus estimate of 239k, with the unemployment rate falling to 3.5%. Average hourly earnings also rose 4.2% on a 12-month basis, the lowest level since June 2021.
Traders are expecting Treasury yields to rise after rising in reaction to the report on Friday, which could support the US dollar and make US bonds more attractive to foreign investors. According to the CME FedWatch tool, there is a 66.3% chance that the Federal Reserve will hike interest rates by a quarter of a point in May.
The European Central Bank is unsure whether a 50 basis point rate hike in May is necessary or whether a cut to a lower 25 basis points is possible, according to a senior ECB official. This could further support the US Dollar Index.
March CPI Report Influencing Fed Policy Decisions
Traders are also anticipating the release of the March Consumer Price Index (CPI), which is expected to have a significant impact on Federal Reserve policy decisions. If consumer prices rise despite the Fed’s aggressive recent rate hikes, investors could set rates closer to the Fed, which could put pressure on riskier asset prices.
The June US Dollar Index futures market may be restricted on Monday and Tuesday. Europe and the UK have Easter holidays on Monday, which could add to the restricted trade.
Daily US Dollar Index for June
Daily US Dollar Technical Analysis for June
The main trend is down according to the daily swing chart. However, the momentum increases after the reversal low on April 5th.
A trade above 102.745 will change the main trend to the upside. A move through 101.090 will signal a resumption of the downtrend.
The smaller range is between 102.745 and 101.090. Its pivot at 101.918 is currently being tested. The main range is between 100.345 and 105.490. Its retracement zone at 102.310 – 102.918 is the next resistance zone.
US Dollar Daily June Technical Forecast
Traders’ reaction to the minor pivot at 101.918 should set the direction for the June US Dollar Index early Monday.
bullish scenario
A sustained move above 101.918 will indicate the presence of buyers. This could trigger a rise to the main Fibonacci level at 102.310.
Bearish Scenario
Continued movement below 101.918 will signal seller presence. The first downside target is a minor pivot at 101.537 followed by the main bottom at 101.090.