The US Dollar breaks lower on Thursday after jobless data starts to turn ugly.

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• The US Dollar breaks lower on Thursday after jobless data starts to turn ugly.
• Traders watch as the Greenback capitulates ahead of the US Nonfarm payrolls print.
• The US Dollar Index sinks below 103 and could head to 102.

The US Dollar (USD) is getting hammered after a very choppy Thursday where three key elements were enough to punish the Greenback. The first of these was a headline from the US Defense saying that plans had been approved for strikes in Iraq, according to CBS. The second element was a more than double positive print in the US Challenger Job Cuts number which shows the number of layoffs is picking up. Add to that both the Initial and Continuing Weekly jobless Claims ticking up as well, and it could be an early sign that the job market is starting to turn.

On the economic front, traders are bracing for two big elements this Friday: the US Jobs Report is the first, where the Nonfarm Payroll Change number will be of importance. Though traders will also look at the Unemployment Rate and the Average Hourly Earnings numbers as well, to further get confirmation after the jobless data from Thursday, as to whether economic growth in the US is starting to turn. To close off this Friday, the University of Michigan is set to publish its Michigan Consumer Sentiment Index.

The US Dollar Index (DXY) underwent a meltdown on Thursday evening and went from nearly reaching 104 to breaking below 103. The mix of a pickup in jobless data together with headlines on approval for US strikes in Iraq and Syria has pushed traders away from the Greenback. Should the US Jobs Report this afternoon prove that employment is starting to stall in the US, the Greenback might be in for more downturn with the DXY heading to 102.

Should the US Dollar Index be able to recover Thursday’s losses and break away from the 200-day Simple Moving Average (SMA) at 103.55, traders should look to the 100-day SMA near 104.30 as the next level. Should the US Jobs Report see its components all fall in favor of more US Dollar strength, however, expect to see another jump higher to 105.12. That would mean a fresh three-month-high for the DXY.

The 55-day SMA at 103 is under pressure and has already been breached earlier this Friday. Should that last level snap, a nosedive move to 102.00 could very well be in the cards here. Certainly should the US Jobs Report reveal a negative print expect to see substantial US Dollar weakness.

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