Current trend

The American USDX index shows mixed dynamics, consolidating near 101.00 in anticipation of new drivers of movement, while at the beginning of the week the instrument demonstrated quite active upward dynamics, which was associated with the speech of the Chair of the US Federal Reserve, Jerome Powell.

The official signaled further monetary easing through the end of the year, but advocated only cutting interest rates by 25 basis points at each meeting. Powell noted that the latest Gross Domestic Product (GDP) data, which showed growth of 3.0% in the second quarter, gives hope that domestic spending will remain strong. However, future decisions by the regulator will, as before, depend on incoming economic data, so the US Fed may well change its position in favor of deeper monetary easing if pressure on the labor market intensifies. Against this backdrop, the probability of a –50-basis-point adjustment in borrowing costs in November fell from 53.3% to 35.4%, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool.

The US dollar also received support from the JOLTS Job Openings data, which increased in August from 7.711 million to 8.040 million, compared to the forecast of 7.655 million. In addition, the final September labor market report will be released in the US at the end of the week. Nonfarm Payrolls are expected to decline from 142.0 thousand to 140.0 thousand, Average Hourly Earnings are expected to remain at 3.8% year-on-year and adjust from 0.4% to 0.3% month-on-month, and the Unemployment Rate is expected to remain at 4.2%. US investors will focus on September data from Automatic Data Processing (ADP) on private sector employment today at 14:15 (GMT 2): the figure is expected to increase from 99.0 thousand to 120.0 thousand.

Support and resistance

On the daily chart, Bollinger Bands are reversing horizontally. The price range has fixed and limits further development of the "bullish" dynamics in the near future. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic is showing similar dynamics; however, the indicator line is already approaching its highs, indicating the risks of an overbought index in the ultra-short term.

Resistance levels: 101.20, 101.67, 102.00, 102.23.

Support levels: 100.80, 100.35, 100.00, 99.50.

Trading tips

Long positions can be opened after a breakout of 101.20 with the target of 101.20 Stop-loss — 100.80. Implementation time: 2-3 days.

A rebound from 101.20 as from resistance, followed by a breakdown of 100.80 may become a signal for opening of new short positions with the target at 100.00. Stop-loss — 101.20.