• Nonfarm Payrolls data published by the U.S. Bureau of Labor Statistics on 8th October showed September payrolls increased by 194,000 falling significantly below expectations where the forecast was an increase of 500,000 jobs. The USDX reaction was quite lack-luster with the market closing down 0.16% on the day.
• FOMC Minutes released on 13th October provided a detailed summary of the Federal Open Market Committee discussions held at September's FOMC meeting where the tapering was one of the headlines. The meeting minutes suggest this could start as early as mid-November to mid-December with a possible rate hike at the end of 2022.
• Retail Sales data for September (Month on Month) published an unexpected increase of 0.7% against the forecast rate of a drop in retail sales by 0.2%. In addition, the August data had an upward revision to 0.9%.

The U.S. Dollar Index ® continued to drop at the start of October after reaching an area of resistance during the prior days trading session at 94.33 - 94.74 (shown on a weekly chart) leaving the September high at 94.52 where the bears gained control after 4 straight positive trading days. ISM Manufacturing PMI data for September was announced on 1st October at 61.1 (showing expansion) this data was above expectations and the previous month’s data but was not enough to hold the market. The U.S. Dollar Index ® closed down for the first day of October trading by 0.21%.

However, even considering the negative start to the month, the week still ended positive (weekending 1st October) with the U.S. Dollar Index ® printing the largest percentage gain since mid-August +0.76%.

The early bearish sentiment after the market closed on the first day of October trading continued when the markets re-opened for trading on Monday until the U.S. Dollar Index ® found more buyers willing to step in, which coincided with a Daily 10 SMA that had provided some support since mid-September. The market took a bounce from this and continued to rally, helped a few days later by positive ADP jobs data (U.S. Dollar Index ® 6th October +0.31% for the day). Propelling the U.S. Dollar Index ® towards the high of the year at 94.52 (from 30th September), where it just fell short and pulled back to leave a fresh weekly high of 94.45 for the first full week of trading in October. Disappointing Nonfarm Payroll data added to the bearish tone although the market found support once more from the Daily 10 SMA closing the week at 94.07 with no change.

During the following week of trading, the U.S. Dollar Index ® saw the bulls return pushing prices higher after another positive reaction from the Daily 10 SMA sending the market upwards where the weekly resistance area was waiting. The U.S. Dollar Index ® again struggled to find its way through and saw increased selling pressure sending the market lower leaving a new twelve-month high at 94.57 (12th October).

September’s Core CPI data released on 13th October gained 0.2% (Month on Month), with Core CPI data Year on Year stable at 4% (same as prior month’s data) however; it is the third highest reading since July’s high at 4.5%, the highest since the financial crisis 2007-2009, highlighting the inflationary pressures and concerns of further price rises. The U.S. Dollar Index ® initial reaction saw prices rally into a resistance area 94.47 - 94.56 on a 4-hour chart before dropping. The FOMC detailed minutes released later in the day were not enough to entice the bulls back and the market sliced straight through the Daily 10 SMA that it had not closed below since early September. A few days later the MACD had a crossover on 14th October on a Daily chart, which indicated a sell signal for those bears who may not have entered earlier, and after a few days of sideways action, the market dropped again.

The biggest daily drop came on 28th October where the U.S. Dollar Index ® had seen weakness exacerbated further by the news from the European Central Bank president commenting on inflation and rate rises for the Eurozone. This news created the Euro to gain strength pushing the US Dollar down (EURUSD) which in turn as the Euro represents almost 58% of the basket within the U.S. Dollar Index ® it had a significant impact.

Prices dropped straight into an area of support on a daily chart 93.20 - 93.38 where on the last trading day of October we saw a significant rebound and the market rallied to close up 0.83% on the day, posting one of the largest one-day moves of the year so far.

The U.S. Dollar Index ® ended the month negative but left a new twelve-month high at 94.57. The trend remains up on a Daily chart although October's price action has been more sideways and has remained trading between a resistance area of 94.33 - 94.74 and a support area of 93.20 - 93.38.

The U.S. Dollar Index ® closed at 94.12 with a -0.2% change.

Correlations

The charts identify price turning points between U.S. Dollar Index ®, Brent Crude Oil (BRN) and Bitcoin (XBT) which could be used to identify periods during which prices of each of the markets appear positively or negatively correlated.