US Dollar Index bounces off lows and tests 96.30

• The index manages to rebound from lows near the 96.00 handle.
• Trade concerns remain the exclusive driver in markets on Friday.
• US Payrolls showed the economy added 250K jobs in October.

After bottoming out in the 96.00 neighbourhood during early trade, the US Dollar Index (DXY) – which tracks the greenback vs. a basket of its main competitors – regained some attention and is now flirting with the 96.35/40 band.

US Dollar bid after auspicious Payrolls

The index rebounded from multi-day lows in the 94.00 area after the latest report on the US labour market showed the economy added 250K jobs during last month, more than initially forecasted (193K) and up from September’s 118K (revised from 134K).

The Dollar also gained extra pace after Average Hourly Earnings, a proxy from wage inflation, rose in line with expectations at a monthly 0.2% and 3.1% from a year earlier. Additional data saw the jobless rate at 3.7% and the trade deficit just a tad lower than prior surveys at $54.0 billion in September.

Still in the US calendar, Factory Orders expanded more than expected in September at a monthly 0.7%.

The greenback is now struggling to keep gains for the third week in a row following the recent pullback from fresh YTD peaks in the 97.20 region clinched on Thursday.

However, rumours and counter-rumours around the US-China trade spat are set to drive the sentiment around the buck in the very near term, although today’s solid results from the US labour market reinforce the case for further tightening by the Federal Reserve, which should be USD-supportive, eventually.

US Dollar Index relevant levels

As of writing the index is losing 0.09% at 96.23 and a breakdown of 95.99 (low Nov.2) would open the door to 95.94 (21-day SMA) and finally 94.79 (low Oct.12). On the flip side, the next up barrier lines up at 96.46 (10-day SMA) seconded by 97.19 (2018 high Oct.31) and then 97.87 (61.8% Fibo of the 2017-2018 drop).