The Dollar is under pressure ahead Friday’s key employment data release.
The Greenback enters midweek trading at its lowest level for two months. (101.17). There are several factors that contribute to the selling pressure this week. Chief among those are the recent challenges to the Dollar’s status as the worlds reserve currency as the Chinese Yuan surpasses the Dollar as the most traded currency for the first time. This is because the BRICS countries are speculating on the possibility that they could trade amongst themselves with an alternate currency to the Dollar.
In the near future, traders will be focusing on U.S data like PMI, ADP employment changes data and Nonfarm Payroll data. In order to keep the DXY below the lows of the year, stronger prints may put a floor beneath it. 100.71 level.
Technical Analysis (D1)
Current Price action, in terms of market structure has formed a potential reverse pattern in the shape of a descending funnel. This pattern is partially validated as an impulsive break in structure. The narrative continues to move upwards as bulls gain control. If buyers are able to defend the…