Fears of an early rate hike after the strong US job report released on Friday caused a greenback rally with DXY triggering the sharp move in the market. While the index testing the good resistance at 75.929 and trying to print a daily close above this level with 55 days SMAVG merges at 75.738, we can find some hints regarding to EURUSD trading.

The break of 75.169 on Friday will probably bring some “post break-out buy on dips” interest in any retrace and stops will be parked around 75.095 accordingly on daily charts which also confirm a possible 1.4935 sell on rally in EURUSD with stops located around 1.4965 area. A daily close below 75.095 in DXY suggests a 74.395 which reflects a close above 1.4969.

I think market is going to square up more short USDs and as DXY breaks the 75.929 on the topside; EURUSD may manage to push the market beyond 1.4820 with a daily close after breaking the 55 days SMAVG at 1.4857. In case of a similar scenario, EURUSD may test 1.4625 to rock the long  term bullish trend channel bottom while  DXY will be eyeing the 38.2% Fibonacci retrace level at 79.014 (86.85 to 74.17 drop).