FxWirePro: US dollar index Daily Outlook

US dollar index continues to trade higher to 5th consecutive days and hits 9- week high at 98.72. The strong US Nonfarm payroll data has supported DXY at lower levels.

US economy has added 225000 jobs in Jan vs forecast of 163000, unemployment slightly ticked up by 3.6% vs 3.5%. Average hourly earnings rose to 3.1% compared to 3% and Dec revised to 3%.

According to the Fed watch tool, the probability of rates to be unchanged has increased to 90% from 84.5%, the chance of 25 bps rate cut declined to 10% from 15.5%.

On the flip side, near term support is at 98.40 and any violation underneath will drag the index down to 98/97.70 (200- day MA).

The index is holding above 98.54 high made on Nov 29th, 2019 and confirms important bullish continuation, a jump till 99.25/99.50.

It is good to buy on dips around 98.40 with SL around 98.20 for the TP of 99/99.25.