At the time of writing on Friday, the US Dollar Index (DXY) dropped to 99.47 after an unsuccessful attempt to break the 100-mark and facing strong resistance. The weakening of the Greenback has been attributed to reports that China may start negotiations with the Trump administration on tariffs. Despite news of potential trade deals, the market is eagerly anticipating a concrete agreement.

Additionally, Bloomberg reported on a mineral deal between the US and Ukraine that was recently signed, although it has limited financial potential for the US and provides no military guarantees for Ukraine. In terms of economic events, the Nonfarm Payrolls (NFP) report for April indicated a rise of 177,000 jobs, slightly above the highest estimate of 171,000. This initially resulted in some strength for the US Dollar, but it was short-lived. The market views this as the last positive reading, with the June NFP report expected to have a bearish impact.

The DXY is currently facing a crucial technical level after a three-day streak of gains. The release of the Nonfarm Payrolls report could be a determining factor for the DXY on Friday, either resulting in continued upward momentum and a break above the 100 level or a decline to new three-year lows if there is a technical rejection.

In the event of an upward movement, the first level of resistance for the DXY is at 100.22, which provided support in September 2024. Reaching and breaking above the key 100 level would be a bullish signal. A significant recovery could lead to a rise to 101.90, which was a pivotal level in December 2023 and also served as the base for an inverted head-and-shoulders formation in the summer of 2024.

On the other hand, any negative news could quickly push the DXY to test the 97.73 support level. In the case of further decline, the next significant support is at 96.94, followed by the lower levels of this new price range at 95.25 and 94.56, which would mark new lows not seen since 2022.

US Dollar Index: Daily Chart