US Dollar Index consolidates losses, headed to lowest weekly close in 14 months
|The US Dollar Index continued to decline during Friday’s American session and erased Thursday’s gains. It is about to post the third weekly decline in a row and the lowest close since April of last year.
DXY unable to find support
The dominant trend continues to point to the downside. On Wednesday, after the FOMC statement, the greenback dropped across the board. The Dollar Index bottomed the next day at 92.96 and rebounded. The recovery was short-lived and after rising toward 94.00, it turned again to the downside.
Today’s US Q2 GDP data sent the DXY toward 93.00. It bottomed at 93.09 and currently stands at 93.20, down 0.50% for the week. Next week, the key economic number will be from the labor market. The US official employment report will be released on Friday.
DXY Levels to watch
To the upside, the immediate resistance is seen at 98.60, above that level a short-term downturn line comes at 98.85; if it rises above, a test of the next resistance at 94.15/20 seems likely.
On the downside, the 93.00 handle is an important support that could be challenged at the beginning of next week. A significant close under 93.00 would open the doors for a continuation of the slide. The next strong support area is not seen until 92.00.
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