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James Hyerczyk
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US Dollar Index

The U.S. Dollar is inching a little higher against a basket of major currencies early Monday after touching its lowest level since February 13 as investors continue to assess the implications for monetary policy of a disappointing U.S. employment report, ahead of inflation data later this week.

At 02:06 GMT, June U.S. Dollar Index futures are trading 90.250, up 0.034 or +0.04%.

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The U.S. created only a little more than a quarter of the jobs that economists had forecast last month and the unemployment rate unexpectedly ticked higher, pouring cold water on speculation the pandemic recovery could spark faster inflation that the Federal Reserve anticipates, according to Reuters.

Some traders are saying that sellers overreacted on Friday and that the jobs market is likely to post a huge gain in May’s report as the economy works out labor and materials shortages.

Daily June U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. It was reaffirmed earlier in the session when sellers took out Friday low. A trade through 91.435 will change the main trend to up.

The short-term range is 89.655 to 93.470. Its retracement zone at 91.110 to 91.565 is the first upside target zone and potential resistance.

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Daily Swing Chart Technical Forecast

The direction of the June U.S. Dollar Index on Monday is likely to be determined by trader reaction to 90.215.

Bearish Scenario

A sustained move under 90.215 will indicate the presence of sellers. Taking out the intraday low at 90.130 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with the February 25 main bottom at 89.655 the primary downside target.

Bullish Scenario

A sustained move over 90.215 will signal the presence of buyers. This will also put the index in a position to form a potentially bullish closing price reversal bottom. If this move creates enough upside momentum then look for a move into the new minor pivot at 90.785.

Side Notes

A close over 90.215 will form a closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 day counter-trend rally.

For a look at all of today’s economic events, check out our economic calendar.
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