According to the Non-Farm Payrolls data, the US economy added 390,000 jobs in May, compared to an expected +325,000. The unemployment rate remained constant at 3.6 percent, compared to the projected 3.5 percent.
The stronger the data, the more difficult it will be to stop or slow the pace of tightening this year. Average hourly wages were stable at 0.3 percent MoM, but continued to decline year on year."
The US Dollar Index (DXY) is recovering, but it might fall further before regaining support.
DXY in the near term:
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It crossed above the previous high of 102.95 but could not sustain above this level and finally closed below this level, therefore the breakout higher could be termed as a false break. It means it is going to face this level of resistance once again. The next level of resistance comes at 103.60, so we can say 102.95-103.60 is the zone of resistance.
It is expected that the current rise in DXY could be short-lived and the zone of resistance would push it lower to complete the ABC corrective pattern. The correction is expected to be completed between 98.50-99.80
Long term scenario:
As there is no divergence between the latest high and the second last high formed on the weekly basis, the longer-term bullish view remains intact. The current phase of correction could be temporary and as per the Fib expansion levels the next target in sight is 106.50