US Dollar Index returns to 94.30 ahead of Payrolls

• DXY trades within a tight range around 94.30.
• US yields attempt a mild rebound on Friday.
• The focus of attention will be on October Payrolls.

The greenback, in term of the US Dollar Index (DXY), navigates a narrow range in the 94.30 zone ahead of the opening bell in Euroland at the end of the week.

US Dollar Index looks to 2021 highs, Payrolls

The index remains side-lined and following the range bound theme prevailing in the rest of the global markets ahead of the publication of the US Nonfarm Payrolls for the month of October.

In the US cash markets, yields across the curve attempt a tepid rebound following the moderate losses recorded on Thursday.

In the US docket, consensus expects the economy to have created 450K jobs during last month while the Unemployment Rate is seen ticking lower to 4.7% during the same period.

What to look for around USD

The index advanced to the vicinity of the 94.50 level on Thursday on the back of the renewed offered stance in the risk-associated universe and despite the knee-jrk in US yields. In the meantime, and while investors continue to digest the Fed meeting, a vigilant stance is expected to prevail in light of Friday’s Nonfarm Payrolls. In addition, the greenback should continue to closely track the performance of US yields and the progress of the current elevated inflation as well as views from Fed’s rate-setters regarding the probability that high prices could linger for longer, all along the performance of the economic recovery against the backdrop of unabated supply disruptions and the equally incessant raise in coronavirus cases.

Key events in the US this week: Nonfarm Payrolls, Unemployment Rate (Friday).

Eminent issues on the back boiler: Discussions around Biden’s multi-billion Build Back Better plan. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. Debt ceiling debate. Geopolitical risks stemming from Afghanistan.

US Dollar Index relevant levels

Now, the index is gaining 0.01% at 94.34 and a break above 94.47 (monthly high Nov.4) would open the door to 94.56 (2021 high Oct.12) and then 94.74 (monthly high Sep.24 2020). On the flip side, the next down barrier emerges at 93.42 (55-day SMA) followed by 93.27 (monthly low October 28) and finally 92.98 (weekly low Sep.23).