US Dollar Index outlook: Dollar extends weakness after downbeat ADP data

Slobodan Drvenica Windsor Brokers

US Dollar Index

The dollar index fell to one week low on Thursday, extending weakness into second consecutive day, after being pressured by dovish comments from Fed Chair Powell, while weaker than expected ADP private sector payrolls report further soured the sentiment.

Fresh acceleration lower broke below daily Tenkan-sen and is pressuring pivotal supports at 105.00/104.90 zone (psychological / Fibo 38.2% of 103.61/105.78 / daily cloud top).

Firm break here to generate initial reversal signal and open way for further retracement of 103.61/105.78 rally.

Technical picture is weakening on daily chart and supports scenario, however, increased headwinds likely to be expected at 105 zone.

Markets await release of US services PMI (June 56.7 f/c vs May 58.1) which could further weaken near-term structure on June figure at / below consensus).

US Labor report on Friday will be also closely watched as one of this week’s key economic events.

Res: 105.27; 105.39; 105.50; 105.78.
Sup: 105.00; 104.90; 104.70; 104.44.

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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