A Big Daily Range For The USD Index

Chaotic price action has defined the USD Index for the past 24 hours. After showing early weakness on Wednesday, post-FED trade acted as the catalyst for a positive close. Today is showing a similar pattern, with a tremendous early-forex session sell-off being largely erased.

On the U.S. economic news front, December jobs numbers were released earlier in the session. Here is a quick look at the data:

Event                                                           Actual      Projected      Previous

Continuing Jobless Claims (Dec. 7)         1.688M         1.665M        1.661M

Initial Jobless Claims (Dec. 14)                 214K                216K            206K

In the aggregate, Jobless Claims have grown, a possible signal of slowing economic growth. Also, the Philadelphia FED Survey (Dec.) came in very low at 9.4. This statistic is arbitrary, but it does vastly underperform expectations (15.0) and November’s figure (12.9). All in all, this was not a good batch of numbers facing the U.S. economy.

USD Index Futures

It appears that FED uncertainty is a major factor influencing the trade of the March USD Index. A huge daily range has been the product, with another long-tailed candlestick setting up on the daily chart.

Here are two levels to watch for the rest of the session:

• Resistance(1): Daily SMA, 96.250
• Resistance(2): Bollinger MP, 96.275

Overview: Today’s rejection of 95.500 as downside support was a welcomed sight for Greenback bulls. At press time, this market is trading just north of the 96.160 level. If bids continue to hit the market, a positive close is not out of the question.

Tomorrow is going to be a pivotal day for the USD Index. With the release of U.S. Core Personal Consumption (Q3), we may be in for even more fireworks before the Christmas break.