In the first trading session of the week, the Dollar Index (DXY) continues being traded bullish. The price action calls for a new high expecting a new labour market data release.
U.S. labour market touched bottom?
This year, during April and May, the unemployment rate U.S. labour market reached 3.6%, the lowest level since 49 years. And despite the slight rise in the unemployment rate to 3.7% reported in June and July, the labour market continues showing strength signals. This week, the Dollar Index will be driven by the labour market data. The analysts’ consensus doesn’t expect changes in the unemployment rate at 3.7% for August.
Is ending the bullish cycle?
On the DXY in its 8-hour chart looks an internal bullish cycle started on August 1st at 98.93. The ascending sequence could reach the area between 99.05 and 100.10. We remark that there exists a critical level at 99.89, which corresponds to the highest level achieved in May 2017. The bullish scenario will be invalidated if DXY closes below 97.86.
However, from the last CoT report, it’s essential to consider that 72.54% of institutional holds long positions. In another hand, 95.82% of commercial traders maintain short positions. In consequence, for DXY, we expect more upsides from the coming trading sessions, likely to the potential exhaustion area.