US dollar bulls could be back for more, but Fed looms

• US dollar awaits the Federal Reserve and critical US jobs data.
• Rate hike timings will be the main focus as tapering is a done deal and priced in. 

The price of the US dollar rallied sharply on Friday as global stocks fell for which at the start of Asia, some corrections are taking shape. In fact, the US dollar index outperformed all the majors on Friday, so a correction in the price is to be expected. However, this is offering the stronger hands a discount to buy the dollar cheaper. The technical analysis is shown below which illustrates the upside potential from an hourly perspective

Meanwhile, all eyes will be on the Federal Reserve this week and the Nonfarm Payrolls report on Friday. The Fed is widely expected to announce its tapering start and plans this week.

''Financial markets are priced aggressively for hikes in 2022, but the Fed is unlikely to endorse or push back on those expectations at this point as we await more inflation evidence. Employment trends are expected to regain momentum, and we anticipate a 520k job gain for Nonfarm Payrolls,'' analysts at Societe Generale explained. 

US dollar H1 chart analysis

As seen, there is still some downside to go before the price meets a key liquidity area on the DXY chart, an index that measures the US dollar vs a basket of currencies. This also has a 38.2% Fibonacci retracement level in confluence with the 94 figure which adds more conviction to the potential support area. 

With that being said, the price is finding some support for the first level of structure that meets with the 23.6% Fibo as follows: