The U.S. dollar index (DXY), a weighted geometric index of the value of the U.S. dollar relative to a basket of six major currencies, tanked 1.41% on Friday to an intraday low of 96.31, or around the 50% Fibonacci retracement level, after the Labor Department said the employment cost index (ECI), the broadest measure of labor costs, edged up just 0.2%, the smallest gain since the series started in the second quarter of 1982. Economists polled by Reuters had forecast the employment cost index rising 0.6%.

The dollar has been strengthening since the FOMC meeting on Wednesday, as the Fed made it clear to the market that it will hike the rate this year, regardless of the tepid U.S. economy. The forward and backward looking U.S. economic data look mixed. The U.S. Bureau of Economic Analysis said Thursday that the first estimate of second quarter 2015 U.S. GDP was 2.3%, missing expectations of 2.6%. For the first half of 2015, the U.S. GDP was revised upward to 1.45% from 1.25%. The U.S. National Retail Federation said this week that 2015 back-to-school sales look grim, and back-to-school is the second largest shopping season in the U.S. behind Christmas.

Technically, the U.S. dollar index is breaking down the bearish ascending wedge pattern. The DXY bounced off 96.27, or the 50% Fibonacci retracement level, for the second time in less than a week. If the 96.27 level breaks down, the U.S. dollar index could head back to retest the 94.05 support level.

The DXY index could be facing downside risks next week if the Personal Income and Outlays data, the ADP Employment Report, and the U.S. non-farm payrolls report disappoint the market. The Bureau of Economic Analysis will release the Personal Income and Outlays data on Monday. The market is expecting the ADP jobs reporting on Wednesday to increase by 210K and about a 225K jobs gain for the non-farm payrolls to be released on Friday.