The American economy has created 223,000 new vacancies in May and this is definitely more than the median of forecasts, which was at the level of 190,000. A month ago, the change in employment amounted to 162,000 new jobs, so the data not only beat the expectations, but beat the previous month reading as well. Moreover, the data for April and March were reviewed in total by 15,000 up. The unemployment rate has dropped further, amounting to 3.8% and contrary to the consensus, did not remain at 3.9% and now is on the lowest levels in history. The key variable for the dollar prospects is recently the wage pressure. The payroll growth rate was 0.3% m/m and 2.7%y/y, so this part of the job report did not disappoint as well.
Another pleasant surprise form the US was the publication of ISM index data for the manufacturing sector: readings exceeded expectations of 58.7 (forecast: 58.2) and the most of the sub-components were moving further into expansion territory as well. In the wake of other indicators of the economic climate, the index indicates the good condition of the US economy.
To sum up: every indicator illustrating the condition of the labor market in the US was better than expected, clearing the way for a rate hike from the Federal Reserve at the June meeting despite renewed concerns about the European debt crisis and global trade relations.
Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has almost hit the larger time frame technical resistance zone between the levels of 95.15 - 95.55. Nevertheless, the bulls failed here and broke out of the channel, which was briefly tested from below after a temporary support has been established at the level of 93.71. The market is currently in the middle of the intraday range, but the conditions are oversold, so another possible test of the level of 94.60 might come soon. Otherwise, if the support at the level of 93.71 is violated, then the next technical support is seen at the levels of 93.42, 93.29 and 93.11.