Underpinned after US Job Growth Tops Expectations

A better-than-expected U.S. employment data hinted to a tight job market, which might encourage the Fed to maintain rate hikes.

June U.S. Dollar Index futures rose 0.328 percent to 102.160. Invesco DB US Dollar Index Bullish Fund ETF (UUP) rose 0.12 percent to $27.30.

Jobs Report Backs Fed's Hawkishness

The Labor Department stated Friday that nonfarm payrolls rose by 390,000 last month. Reuters economists predicted 325,000 new jobs in May. Unemployment was 3.6% and average hourly earnings were 0.3%.

The better-than-expected job gain implies the economy is still robust, but the drop in average hourly pay signals growth is beginning to decelerate.

Long-Side Specs Lighten

Despite expectations for higher rates, the market suggests this has already been priced into the dollar. Government data shows dealers unwinding dollar longs. Traders may still purchase the dollar as a safe-haven.

Speculators' net long bets on the U.S. Dollar plummeted to a 5-week low, Reuters and CFTC data show.

Net long dollar position was $14.71 billion on May 31. Last week, speculators net long $17.65.

Technical Analysis Daily Swing Chart

Daily swing chart shows a downtrend. A transaction over 102.750 will reverse the trend. Passing 101.420 will resume the downturn.

97.730-105.065 is the range. 101.395 to 100.530 is support.

99.810 to 105.065 The index is probing 102.440 to 101.815.

Short-term range: 105.065-101.420. If the trend turns to up, 103.245 might be tested.