US Dollar Index Takes U-Turn, Dips Back Below 105.00
The US Dollar Index, which measures the value of the dollar versus a basket of currencies, turned lower and fell sharply during the New York session, pulling back from a two-week high of 105.55 to a low of 104.64.
The DXY is trimming weekly gains after two daily advances in a row as the dollar weakened across the board following US data and amid month-end profit-taking. At the time of writing, the DXY is trading at 104.70, 0.4% below its opening price.
The US Core Personal Consumption Expenditure Deflator increased by 0.3% in May, below market expectations of a 0.4% increase. The Core PCE Price Index increased by 4.7% YoY, also below the investor estimates showing a deceleration of the preferred Federal Reserve’s estimate of inflation. Data also showed data consumer spending rose just 0.2% in May, and real personal spending dropped 0.4%.
Meanwhile, the US jobless claims came in at 231K in the week ending on June 24, missing market expectations of 228K, while the underlying trend in claims moved slightly higher, suggesting that the labor market is moderating to the Fed’s contractive policies.
According to the daily chart, the DXY holds a bullish short-term perspective with its indicators holding into positive territory, although losing momentum after the recent decline.
The RSI gained is heading south but well above its midline, and the MACD printed a lower green bar, indicating decreasing buying interest.
On the upside, the next resistance levels can be seen at the 105.50 area, followed by the June 15 high of 105.78. Beyond this level, the DXY would be trading at its highest in nearly 20 years, targeting the 106.00 area.
Alternatively, immediate support is seen at the 104.60 area, followed by the 104.00 zone where the 20-day SMA reinforces the psychological level.
The DXY is trimming weekly gains after two daily advances in a row as the dollar weakened across the board following US data and amid month-end profit-taking. At the time of writing, the DXY is trading at 104.70, 0.4% below its opening price.
The US Core Personal Consumption Expenditure Deflator increased by 0.3% in May, below market expectations of a 0.4% increase. The Core PCE Price Index increased by 4.7% YoY, also below the investor estimates showing a deceleration of the preferred Federal Reserve’s estimate of inflation. Data also showed data consumer spending rose just 0.2% in May, and real personal spending dropped 0.4%.
Meanwhile, the US jobless claims came in at 231K in the week ending on June 24, missing market expectations of 228K, while the underlying trend in claims moved slightly higher, suggesting that the labor market is moderating to the Fed’s contractive policies.
According to the daily chart, the DXY holds a bullish short-term perspective with its indicators holding into positive territory, although losing momentum after the recent decline.
The RSI gained is heading south but well above its midline, and the MACD printed a lower green bar, indicating decreasing buying interest.
On the upside, the next resistance levels can be seen at the 105.50 area, followed by the June 15 high of 105.78. Beyond this level, the DXY would be trading at its highest in nearly 20 years, targeting the 106.00 area.
Alternatively, immediate support is seen at the 104.60 area, followed by the 104.00 zone where the 20-day SMA reinforces the psychological level.