However, on the 4H chart, there is strong divergence at this point.
Furthermore, since late April, DXY has trended upwards on the 4H chart.
If the trendline indicated holds, and DXY stays above 94.00, I expect the dollar to recover.
Fundamentally, I feel that a neutral Fed has already been priced in to the market, and weakness in other major currencies relative to the dollar (AUD, NZD, EUR, GBP) should mean that we will see some dollar strength over the next 1-2 months.
However, the September Fed meeting should be closely eyed, and if DXY breaks 94.00 there is considerable risk to the downside.
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NFP was a disappointment, but DXY is back to pre-NFP levels. I think this suggests long term upside potential in the US dollar.
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DXY is respecting the above trendline as support. The trade is still valid.