Strong Dollar Odds Amid Weak U.S Jobs Report    

An unimpressive U.S. economic report had little impact on the safe-haven currency. Currency traders bet that the Federal Reserve won’t be swayed from beginning to taper off its asset purchases as early as November following the release of last week’s U.S employment report.

On Friday, the Labor Department reported a 194,000 increase in nonfarm payrolls. A rise of 500,000 jobs was forecast earlier by economists.

Despite the modest gain, analysts said, the Federal Reserve is unlikely to hold back on reducing its monthly bond purchases as soon as November, given the apparent sharp slowdown in the third quarter.

Until the Federal Reserve’s Nov. 2-3 policy meeting, September’s employment report is the last report available.

There is some disappointment in the Job Report, but the details are not as nefarious as the headline suggests, so the Fed is still on track to deliver tapering next month.

Against six major currencies, the dollar index was down 0.1% at 94.067, not far from last week’s one-year high of 94.504.

The price of DXY bulls has hovered near the high from November 2020 within a 6-hour period.

The DXY could continue to move higher if markets continue to believe that the Fed will announce tapering at its November meeting.  Resistance is found near the highs of September 30th at 94.50, and then at the highs of September 2020 at 94.72.

A potential long might enter on support to take advantage of trend continuation from a tactical perspective. It may be prudent to wait for the resistance line to break first if one is looking to take advantage of further upsides.

Experts expect the dollar to remain strong as the Fed made it clear they don’t need remarkable jobs report to taper in November, so despite some pullbacks in the dollar, experts still think the Fed is still aiming for the November taper.