The US Dollar Index (DXY) continued its upward streak, marking five consecutive bullish days following a robust Nonfarm Payrolls (NFP) report for September. The US labor market outperformed expectations, with stronger job additions and revisions to previous months’ figures. The unemployment rate fell to 4.1% from 4.2%, and wage growth increased to 4.0% year-on-year, signaling a resilient economy.
These positive labor market indicators diminished market hopes for an outsized rate cut by the Federal Reserve in November. The CME’s FedWatch Tool now shows a 95% chance of a modest 25-basis-point rate cut, with a 5% chance of no cut.
Technically, the DXY is testing key resistance levels, breaking above 102.00 and challenging the 50-day Exponential Moving Average (EMA) at 101.90. A potential breakthrough above the 200-day EMA at 103.50 could indicate further strength, while failure to break through could lead to consolidation or a decline toward 101.00. The overall trend suggests a short-term recovery for the dollar, with potential upside momentum if resistance levels are surpassed.


