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  • DXY clings to gains and trades close to the 97.00 mark.
  • US Non-Farm Payrolls surpassed consensus during May.
  • US unemployment rate ticked lower to 13.3% during last month.

The US Dollar Index (DXY), which tracks the buck vs. a bundle of its main rivals, is slightly into the positive ground in the 97.00 area on Friday.

US Dollar Index propped up by data

The bull run in the index to the 97.00 neighbourhood was in response to the unexpected positive news from the US labour market. Against all odds, the economy created more than 2.5 million jobs during May, beating forecasts for a loss of around 8 million jobs.

In the same tone, the jobless rate, which was expected at levels close to the 20%, came in at 13.5%, actually bettering April’s 14.7%.

Further data saw the Average Hourly Earnings contracting at a monthly 1.0% and expanding 6.7% from a year earlier.

In the meantime, the bearish note has not abandoned the buck – if just for a brief moment – leaving the index vulnerable to further retracements, particularly following the recent breach of the 2019-2020 support line in the 97.00 neighbourhood.

What to look for around USD

The greenback remains under heavy pressure at the beginning of the month, prolonging the downtrend well below the 97.00 mark and always against the backdrop of the solid pick-up in the appetite for riskier assets. In the meantime, the dollar remains vigilant on the US-China trade front, the gradual return to some sort of normality in the US economy and the broader risk trends as main drivers of the price action. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value.

US Dollar Index relevant levels

At the moment, the index is gaining 0.04% at 96.79 and a breakout of 97.87 (61.8% Fibo of the 2017-2018 drop) would aim for 98.47 (200-day SMA) and finally 99.02 (100-day SMA). On the other hand, the next support lines up at 96.44 (monthly low Jun.5) followed by 96.33 (monthly low Dec.31 2019) and then 96.03 (50% Fibo of the 2017-2018) drop.