Dollar index drops modestly ahead of employment data

The US dollar weakened during the American session and erased gains in the market. The decline took place even after the release of better-than-expected economic data. 

DXY back below 101.00

The US dollar index peaked at 101.64, the highest level since Friday but then turned to the downside. It bottomed recently at 100.89 and it was trading at 100.90/93, in negative territory for the third day in a row but it held above Monday’s low at all times. 

US GDP and Consumer Confidence data, that showed numbers above expectations failed to lift the US dollar. The calendar showed busy days ahead. Tomorrow will be the turn of ADP private employment, personal income and spending, Chicago PMI and pending home sales. The main number of the week will be on the NFP report on Friday. 

In the bond market, US bond yields were mostly unchanged. The 10-year that rose to 2.348% dropped later to 2.305%. Stock indexes were about to end with gains, after a negative opening. The Dow Jones was up 0.15% while the Nasdaq was rising 0.40%. 

DXY Technical levels 

To the upside, resistance could be seen at 101.60/65 (Nov 28 & 29 high),  102.05 (Nov 24 high) and 102.20 (Apr 2003 high). On the flip side, support levels might lie 100.60 (Nov 22 & 28 low), 99.95 (Nov 17 low) and 99.40 (Nov 15 low).