US Dollar testing lows near 101.80, NFP eyed

The greenback – tracked by the US Dollar Index (DXY) – remains on the defensive in the second half of the week, now testing lows in the 101.80 ahead of key US data.

US Dollar focus on Payrolls

The index has come under renewed selling pressure since Thursday after being rejected once again from the critical resistance area at 102.30.

Despite expectations of a rate hike at the March meeting remains firm, market sentiment around the buck is giving some signs of exhaustion, as much of the potential hike could be already priced in.

However, yields in the US money markets have climbed to fresh yearly highs in recent sessions - with the 10-year reference currently above 2.61%, a tad lower than yesterday’s tops above 2.62% - somewhat limiting occasional pullbacks.

Later in the session, bets of a rate hike next week and the Dollar will be put to the test in light of the publication of February’s Non-farm Payrolls. Market consensus expects the economy to have added 190K jobs during last month while the jobless rate is seen at 4.7%.

US Dollar relevant levels

The index is losing 0.17% at 101.81 facing the immediate support at 101.70 (low Mar.9) followed by 101.35 (20-day sma) and finally 101.22 (low Mar.6). On the other hand, a breakout of 102.25 (high Mar.2) would open the door to 102.82 (78.6% Fibo of the 2017 drop) and then 103.81 (2017 high Jan.3).