FOREX: USD Index Extending Post Payrolls Surge
Jun-08 09:33
- The USD index has spent Monday’s session consolidating above the 100 mark following Friday’s highest daily close since March 30. Markets continue to digest last week’s stellar US employment data which has placed further upward pressure on Fed hiking odds in 2026.
- Combined with this, equities remain comfortably off their recent record highs as the lack of ceasefire details and renewed conflict in the Middle East broadly weighs on risk sentiment, underscoring the renewed dollar optimism. This brings the focus back on a key cluster of resistance for the DXY between 100.50/65, which will remain the key obstacle to a further extension north for the greenback.
- Latest weakness for EURUSD has confirmed the recent underlying bearish trend, and the pair is now trading below the bear channel base, which intersects at 1.1541. Spot is hovering just above 1.1500 as we approach the NY crossover, with the focus turning to 1.1411 which remains the key support, the March 13 and 16 lows.
- Overnight highs in USDJPY of 160.39 mean the pair has further narrowed the gap to key resistance of 160.72, the pre-intervention highs reached on April 30. Spot has subsequently drifted back to 160 as intervention worries remain present.
- The backdrop of cyclical USD strength could also target attention to USDCHF as an attractive long for participants looking for a carry position, with the intervention angle more favourable for the pair amid the SNB's continued verbal push in favour of a weaker franc. USDCHF extends fresh 2-month highs in recent trade, continuing to narrow the gap to the year’s highs at 0.8042 with the SNB meeting to follow the FOMC next week.
- Both the data calendar and central bank speak remain light today amid the Fed's and ECB's blackout / quiet periods, and just NY Fed inflation expectations being scheduled.
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