Maybe you are wondering what will happen with the US dollar in the upcoming period because we had an important drop in yesterday’s trading session. USD decreased as the USDX has slipped lower. The index is fighting hard to recover after yesterday’s drop, but it remains to see if it will have enough energy to get back above the 97.00 psychological level.

A USDX’s significant drop will force the USD to lose more ground versus all its rivals. Maybe we’ll have another breakout attempt above the near-term dynamic resistance in the upcoming days.

USDX increased significantly in the last hours because we had some good numbers from the US. The Non-Farm Employment Change increased from 118K to 250K in October, beating the 194K estimate, the Average Hourly Earnings increased by 0.2%, matching the 0.2% estimate, while the Unemployment Rate remains steady at 3.7%. The Factory Orders increased by 0.7%, more versus the 0.5% estimate, but unfortunately, the Trade Balance has decreased from -53.3B to 54.0B.

You can see that the index has slipped below the inside sliding line (SL) of the major descending pitchfork and below the upside 50% Fibonacci line of the ascending pitchfork. So, we have only a false breakdown below the confluence area formed at the intersection between the mentioned lines. A false breakdown could signal a potential upside momentum, but it remains to see what will happen in the upcoming days.

A failure to stay above the SL and above the upside 50% Fibonacci line it will signal a significant retreat and a USD’s drop. Personally, I still believe that the rate will try once again to make a valid breakout above the UML, but you should know that another false breakout or a failure to reach this line it will announce sharp drop.