US Dollar quiet around mid-93s, looking to close first week of August on a high note

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, is spending the last hours of the week in a very tight range around mid-93s as trading volume thins out. As of writing, the index was at 93.45, up 0.8% on the day. 

Today's robust employment report from the U.S. triggered a long-awaited USD recovery in the early NA session, allowing the index to record its best daily percentage gain since December 14 and turn positive in the week after three straight weeks of heavy losses. The U.S. Labor Department announced that nonfarm payrolls rose by 209,000 jobs in July. Moreover, June's employment increase was also revised up to 231,000 from 222,000 while the unemployment rate eased to 4.3%, adding to the rally's momentum. 

• US: Total nonfarm payroll employment increased by 209,000 in July

Commenting on the data, "it was strong across the board and it puts the Fed still on track to start the program to wind down the book in September and it’s a long ways off in December for the next rate hike," Justin Lederer, interest rate strategist at Cantor Fitzgerald in New York, told Reuters. In fact, the CME Group FedWatch tool showed that the markets were pricing a 47% probability of a December rate hike after the report.

• US: Good jobs report offers clear positives for the Fed - ING

In the meantime, during an interview with Bloomberg TV, White House economic adviser Gary Cohn claimed that his number one priority was to get a comprehensive tax bill completed as early as fall, easing concerns over the Trump administration's ability to push through the reform this year.

• WH Eco. Advisor Cohn: Comprehensive tax bill to be completed in early fall - BBG

Technical outlook

It's still too early to say that the index started a lasting recovery, however, the fact that next week's economic calendar won't be offering any significant macro data from the U.S. could keep this movement alive in the short-term. The index could face the first hurdle at 93.80 (Jul. 28 high) ahead of 94.20 (Jul. 21 high) and 95 (psychological level/Jul. 20 high). On the downside, supports align at 93 (psychological level), 92.40 (Aug. 2 low) and 91.90 (May 3, 2016, low).