It was a fairy tale ending to a positive week for king Dollar after non-farm payrolls for January smashed market expectations.
The mighty Dollar appreciated against every single G10 currency excluding the Japanese Yen as investors cheered the fact that the United States added an impressive 225,000 jobs to its economy. Although the unemployment rate slightly edged up to 3.6%, it is still around historic lows. While average earnings picked up to 3.1% from year earlier – compared with 2.9% in December.
Overall, the data is certainly encouraging with the US labour markets alive and kicking in the face of global growth concerns.
This positive sentiment is not being fully reflected in the Dollar as of writing. However further upside should be on the cards as confidence improves over the US economy.
Taking a look at the technical picture, the Dollar Index is trading around 98.50 as of writing. A breakout above 98.50 should open a path towards 98.90 and 99.30.
If 98.50 proves to be reliable resistance, the Dollar Index could sink back towards 97.80.
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