The U.S. dollar, measured by the DXY snapped a 3-day winning streak and faced some selling pressure on Wednesday against the backdrop of the resumption of risk appetite across financial markets.
At the time of writing, the DXY trades at the 106.35 area, recording a 0.47% loss after falling to a daily low of 106.29.
The dollar failed to capitalize on the upbeat revision of the Q3 GDP figures. Data showed the revision of the U.S. Gross Domestic Product grew by 2.9% in the third quarter, beating the initial estimate and consensus of 2.6%.
On the other hand, ADP released November’s jobs report, which showed that the private sector created 127,000 jobs, missing the market expectations of 200,000.
On Friday, the U.S. will publish the nonfarm payrolls report, which is expected to show the economy added 200.000 jobs in November. Investors will also closely follow U.S. manufacturing and services PMIs by ISM and the PCE price index, which is the Fed’s preferred inflation gauge.
During the New York afternoon, the Fed will publish the Beige Book while Chairman Jerome Powell will speak on monetary policy for the first time since the last decision’s press conference on Nov. 2.
From a technical standpoint, the DXY short-term technical outlook remains neutral to slightly bearish, according to indicators on the daily chart. On the downside, the 106.00 level offers immediate support, followed by the 200-day SMA at the 105.45 area.
A break below this level could increase the bearish pressure and expose the 105.00 zone. On the other hand, short-term resistance is seen at the 106.90-107.00 zone, while a break above the 20-day SMA at 107.30 could ease the short-term pressure.