The DXY is expected to display more losses if it declines firmly below 10950, Pivot Orderbook analysis

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• The DXY is expected to display more losses if it declines firmly below 109.50.
• The risk-off tone has faded for a while ahead of US NFP.
• Cues from US ADP employment data indicate a plunge in US NFP data.

The pair currently trades last at 109.52.

The previous day high was 110.0 while the previous day low was 108.65. The daily 38.2% Fib levels comes at 109.49, expected to provide support. Similarly, the daily 61.8% fib level is at 109.17, expected to provide support.

The US dollar index (DXY) is looking to extend its losses as a slippage below the immediate support of 109.53, which will drag the asset towards the critical cushion of 109.20. An inventory distribution phase is likely to turn into a breakdown as the risk sentiment rebounded in the late New York session after remaining negative.

Earlier, the asset printed a fresh 19-year high at 109.98 after the release of higher-than-expected US ISM Manufacturing PMI data. The index remained short of hitting the psychological resistance of 110.00 and displayed a loss in upside momentum.

As interest rates are hiking with immense pace by the Federal Reserve (Fed) and plenty of funds have been squeezed from the market. The corporate sector has inculcated additional filters on investment proposals and has postponed its expansion plans. Therefore, the US ISM Manufacturing PMI was expected to remain vulnerable. However, a surprisingly higher PMI strengthened the DXY. The economic data landed at 52.8, higher than the estimates of 52 and similar to the prior release.

Week’s show stopper event of US Nonfarm Payrolls (NFP) is expected to surprise the market significantly but will also provide a clear picture of the journey ahead. As per the expectations, the US economy has added 300k jobs in August vs. 528k, recorded in July.

Earlier, the US Automatic Data Processing (ADP) reported 132k job additions with the deployment of unconventional methodology for employment scrutiny. Considering the cues from US ADP, a vulnerable performance is expected from the US NFP data ahead.

Key data next week: S&P Global PMI, ISM Services PMI, Goods and Services Trade Balance, and Initial Jobless Claims.

Major events next week: US holiday on September 5, RBA interest rate decision, BOC monetary policy, and ECB interest rate policy.

Technical Levels: Supports and Resistances

EURUSD currently trading at 109.52 at the time of writing. Pair opened at 109.67 and is trading with a change of -0.14 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 107.45, 50 SMA 106.79, 100 SMA @ 104.84 and 200 SMA @ 100.88.

The previous day high was 110.0 while the previous day low was 108.65. The daily 38.2% Fib levels comes at 109.49, expected to provide support. Similarly, the daily 61.8% fib level is at 109.17, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 108.88, 108.09, 107.53
• Pivot resistance is noted at 110.23, 110.79, 111.57

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