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US Dollar Forecast: DXY Tests Support as Bitcoin Hits $100K and Gold Awaits NFP
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Key Points:
- DXY holds support at 105.727, with traders eyeing Friday’s Non-Farm Payrolls for a potential breakout above 106.843.
- Gold prices remain range-bound as analysts predict a robust 200,000 job increase in November payrolls.
- Bitcoin soars past $100,000, fueled by Trump’s SEC nomination and Powell’s comparison to digital gold.
- A bullish NFP report could push DXY to 108.071, while a weak print risks a fall to the 50-day moving average at 104.487.
In this article:
U.S. Dollar Index Holds Key Levels as Traders Await Non-Farm Payrolls
The U.S. Dollar Index (DXY) edged lower Thursday but rebounded off its session low of 105.727. Support at this level is bolstered by the 50% retracement at 105.722 and the November bottom of 105.615. On the upside, gains remain limited by the pivot at 106.843, with the market trading within a narrow seven-session range.
This consolidation reflects trader anticipation ahead of Friday’s pivotal Non-Farm Payrolls (NFP) report. A bullish NFP print could drive the DXY above 106.843, targeting 108.071, while a weaker-than-expected report risks a decline toward the 50-day moving average at 104.487 and potentially the 200-day moving average at 104.064.
Treasury Yields Rise Ahead of Economic Data
U.S. Treasury yields climbed Thursday as markets processed a mixed batch of labor market data. The 10-year yield rose 2 basis points to 4.203%, while the 2-year yield increased 5 basis points to 4.171%.
Initial jobless claims for the week ending November 30 came in at 224,000, exceeding the 215,000 expected. However, continuing claims fell by 25,000 to 1.871 million, suggesting underlying resilience in the labor market. A weaker-than-expected ADP private payrolls report on Wednesday, showing 146,000 new jobs versus a 163,000 forecast, has tempered expectations for Friday’s NFP results.
Gold Markets Eye NFP Impact
Gold prices traded lower Thursday as markets focused on the upcoming NFP report. Analysts expect a robust 200,000 increase in November payrolls, compared to a marginal 12,000 rise in October.
Ole Hansen, head of commodity strategy at Saxo Bank, noted that gold remains range-bound, lacking directional momentum. A weaker jobs report could support gold, especially given the likelihood of a seasonal decline in the U.S. dollar during December. Market consensus is also pricing in a 74% chance of a 25-basis-point Federal Reserve rate cut at the December meeting, which could further support bullion prices.
Bitcoin Surges Past $100,000 Milestone
Bitcoin soared above $100,000 for the first time late Wednesday, extending gains to $101,510 in Thursday trading. The flagship cryptocurrency is up over 140% in 2024, fueled by optimism following President-elect Donald Trump’s announcement to nominate Paul Atkins as SEC Chair, signaling potential regulatory easing. Federal Reserve Chair Jerome Powell likened Bitcoin to digital gold, further boosting sentiment, though he emphasized it lacks utility as a payment method.
Market Forecast
Traders are positioned cautiously as the DXY remains at critical technical levels. Friday’s NFP data will likely set the tone for near-term price action. A strong jobs report could trigger a bullish breakout above 106.843, with potential gains extending toward 108.071. Conversely, a downside surprise may catalyze a bearish move, with key supports at 104.487 and 104.064.
For now, the dollar’s momentum hinges on labor market data, with broader implications for gold, Treasury yields, and overall market sentiment.
More Information in our Economic Calendar.
About the Author
James Hyerczykauthor
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.
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