Us Dollar On Backfoot After Weak Adp Data

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Us Dollar On Backfoot After Weak Adp Data

US Dollar On Backfoot After Weak ADP Data

It appears that the US Dollar will have a difficult trading day ahead of it, with the DYX sitting at 48 weeks high. There are many high-volatility events lined up ahead, which means we will see more movement in the USD FX pairs.

The central Bank of Poland will announce its interest rate decision and thus is closely watched by the market players. According to the experts, this event is going to be very volatile & thus can affect the markets.

ADP Numbers Below 100K

For now, the catalyst is the ADN numbers, which have gone below the 100K level. Everyone knows that the ADP doesn't have any link with the US NFP, but some believe that it does provide a hint about the US jobs market.

Next up, we have the ISM's September reading for the US service sector, which will provide a hint at how the US economy is performing in the given macroeconomic environment.

Technically, the US Dollar Index (DXY) is not showing any decisive moves as of late, which can be viewed as the calm before the storm. The important economic data scheduled ahead will play a key role in determining the next direction of the DXY.

Furthermore, the RSI indicator tells us that the DYX is now in an overbought condition, which means it is trading higher than its fair price. From a technical analysis perspective, the RSI reading will likely limit the DXY from making any more upside movements.

The opening price of the DXY was near 107.24 and has since failed to register any meaningful upside movement as the overbought RSI is capping the price action. For now, the real question is whether the DXY will close above 107.19 on the daily timeframe or below it. After 107.19 (high), we also have 109.30, which will be the next level for the DXY bulls.

On the contrary, the 105.88 support is the most relevant one, which used to be a resistance sometimes back.

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