The US Dollar holds steady against its major rivals to begin the week
The US Dollar stays resilient on Monday after posting strong gains against major rivals last week. The USD index – which tracks the USD's valuation against a basket of six major currencies – stays within a narrow consolidation channel above 101.50. The USD gathered strength in the second half of last week as the data from the US revealed that the economy continued to grow at a healthy rate in the second quarter, while labor market conditions remained tight. As the US Bureau of Economic Analysis' monthly report showed that the Personal Consumption Expenditures (PCE) Price Index rose at a softer pace than anticipated, the USD rally lost steam ahead of the weekend.
The US economic docket will feature important labor market-related data releases this week, which could drive the USD's valuation. On Tuesday, the US Bureau of Labor Statistics will publish JOLTS Job Openings figures ahead of the ADP private sector employment on Wednesday and Nonfarm Payrolls on Friday. The ISM Manufacturing and Services PMI surveys will also be watched closely by investors this week. The US Dollar Index (DXY) closed above the 20-day Simple Moving Average (SMA), currently located at 101.30, on Friday after testing that level in the early American session. In the meantime, the Relative Strength Index (RSI) indicator on the daily chart stays near 50 on Monday, reflecting a lack of directional momentum. On the upside, 102.00 (static level, psychological level) aligns as initial resistance before 102.50 (50-day SMA, 100-day SMA). A daily close above the latter could attract buyers and pave the way for an extended uptrend toward 103.00 (psychological level, static level). Looking south, 101.30 (20-day SMA) stays intact as key support level. If DXY drops below that level and starts using it as resistance, 101.00 (psychological level, static level) could be seen as interim support ahead of 100.50 (static level) and 100.00 (psychological level).