US Dollar Index cuts losses, moves to 98.40 post-NFP

• DXY reverses the daily drop and tests 98.40.
• US economy created 164K jobs in July.
• Average Hourly Earnings surprised to the upside.

The greenback is now managing to gather some traction following the release of the US labour market report and is pushing the US Dollar Index (DXY) back to the 98.40 area.

US Dollar Index stays capped by 99.00 so far

The index stays under pressure following a mix of neutral/bullish Payrolls and increasing trade concerns after Trump announced further tariffs on Chinese products.

In fact, the buck managed to regain some shine after the US economy added 164K jobs during July, a tad below estimates; while the jobless rate remained at 3.7%, matching consensus.

Of note, however, was the performance of wage inflation pressure gauged by the Average Hourly Earnings, expanding 0.3% inter-month and 3.2% over the last twelve months.

DXY, in the meantime, trades on the defensive for the second session in a row and keeps correcting lower after yesterday’s new 2019 highs in levels just below 99.00 the figure.

US Dollar Index relevant levels

At the moment, the pair is losing 0.10% at 98.30 and a breakdown of 97.98 (10-day SMA) would open the door to 96.91 (200-day SMA) and then 96.67 (low Jul.18). On the flip side, the next up barrier aligns at 98.93 (2019 high Aug.1) seconded by 99.89 (monthly high May 2017) and finally 100.00 (psychological level).