The US Dollar Index (DXY) fell across the board as a result of the worse than expected employment report. The disappointing data put a bid back into the treasury market, helping to drive down US yields. The shrinking yield differential hurt the greenback, allowing the DXY to close near the key 38.2% retracement. Although, the recent relapse has produced a normal sized correction in terms of size, the rapid pace suggests further weakness in the near-term. While price-action remains capped by the important psychological 80 level, the 50% retracement at 78.55 is next targeted. Meanwhile, the Proshares Dollar Index (UUP) has broken below the pivotal 23 region to potentially refocus key support at the 22 handle.
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The EUR/USD extended recent gains, closing the day near 20-day moving average resistance and the key 38.2% retracement level. The current rebound has exceeded the size of the previous corrective rally in mid November. This along with the formation of a weekly hammer, suggests strength towards the 50% retracement near the 1.36 handle. Meanwhile, the Euro Index (EXY) has regained the key 50% retracement at the 107 level to refocus the important former swing low at 108.
