• DXY initially jumped 0.80% to 103.90 post-NFP release before giving up gains

• January payrolls smashed expectations with 353K new jobs vs 180K forecast

• Bond yields spiked temporarily before stabilizing at elevated levels

The US Dollar's (USD) paradoxical performance last week left traders scratching their heads. While Friday's Nonfarm Payrolls (NFP) report showed remarkable labor market strength - typically dollar-positive - the greenback ultimately closed lower against major counterparts.

Federal Reserve Chair Jerome Powell's recent comments created market whiplash. Though he downplayed March rate cut possibilities, traders interpreted the strong jobs data differently. Some analysts suggest the market now sees May as the probable start of easing, creating dollar selling pressure.

Key Economic Indicators That Moved Markets

● January unemployment held at 3.7%, beating 3.8% expectations

● Wage growth accelerated to 0.6% monthly (4.5% annualized), signaling persistent inflation pressures

● Treasury yields saw dramatic moves: 2-year notes hit 4.38% before settling at 4.25%

● CME FedWatch Tool shows March cut probability dropped to 20% from 40% pre-report

Technical Perspective: Bullish Signals With Caveats

Chart patterns reveal intriguing dynamics. The DXY's ability to hold above the 200-day moving average suggests underlying strength, while the 100-day SMA continues acting as resistance. Momentum indicators paint a mixed picture:

● RSI maintains positive slope but hasn't entered overbought territory

● MACD histogram shows waning bullish momentum

● Key support now at 103.20, resistance at 104.50

Market participants appear torn between strong economic data and expectations for delayed Fed easing. This tension will likely drive currency volatility in coming weeks as new data emerges.