Key Points:
The dollar’s strength reflects reduced expectations for deeper rate cuts after last week’s U.S. economic data showed inflation rising slightly above forecasts, though jobless claims also climbed to 258,000.
Fed Governor Christopher Waller, speaking later today, may offer further insights, particularly as his recent remarks suggested support for rate reductions to combat slowing inflation.
Picture: US Dollar Index climbs to 102.805, with bullish momentum building as it tests resistance near 102.945 amidst shifting Fed policy expectations, as seen on the VT Markets app.
The US Dollar Index (USDX) closed at 102.805, posting a modest increase of 0.15% during the session.
The price oscillated between 102.685 and 102.870, showing limited but steady upward momentum.
The MACD (12, 26, 9) is now in positive territory, with the MACD line trending above the signal line and positive histogram bars expanding, signalling improving bullish sentiment.
The price has risen above key moving averages (5, 10, and 30-period), confirming a bullish alignment.
These technical indicators suggest the USDX may maintain upward pressure soon.
A key level to watch is 102.945, the session’s high, which acts as short-term resistance. A breakout above this level could open the door to further gains.
On the downside, 102.435 serves as critical support. A break below this level could signal a potential pullback, testing lower ranges around 102.200.
Recent market dynamics reflect improved sentiment toward the US dollar as traders weigh inflation data and evolving Federal Reserve policy expectations.
The Federal Reserve’s recent dovish signals, suggesting the tightening cycle may pause, have tempered some gains.
See also: Dollar Surges as Fed Outlook Stays Cautious | VT Markets
However, rising geopolitical risks and softening demand in risk assets could maintain demand for the US dollar as a safe-haven currency.
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