The US Dollar Index (DXY) has retraced a quarter of recent gains. A daily close below 100-day moving average support exposes the 38.2% retracement at 79.240. While the presence of three hourly lower tops suggests further corrective weakness, reclaiming the latest intraday high at 81.020 could stabilize selling pressure. Focus now shifts to tomorrow's employment reports out of Canada and the United States. A better than expected non-farm payrolls number could trigger further narrowing of yield differentials, which could stand to benefit the greenback.
The EUR/USD continues to benefit from reduced risk aversion. An hourly inverse Head & Shoulders formation has been completed, projecting strength to the 38.2% retracement near the 1.33 handle. Only a loss of former neckline resistance at 1.3150 softens the outlook.
