Month to date, versus a basket of six international currencies, the greenback is nearly 2.0% lower. Technically speaking, according to the latest Weekly Market Briefing, selling was likely on the table and should not really surprise.
Monthly chart: Room to extend losses
You will likely recall from the weekly report that the buck has been on the ropes since the beginning of Q4 in 2022 after recoiling from the underside of a monthly ascending channel resistance taken from the high of 103.82. And, as also put forward in recent analysis, the key observation is that the dollar remains depressed and technical expectations call for further selling towards support from 99.67 on the monthly.
In the context of the Relative Strength Index (RSI), the indicator has still yet to cross swords with its 50.00 centreline, which happens to be shadowed by an indicator trendline resistance-turned-support pencilled in from the high 82.87. Therefore, we could still push lower regarding momentum until reaching the aforementioned barriers.
Daily chart: Local support eyed though downside appears favoured
Following on from the Weekly Market Briefing, which also showed evidence of downside risks on the daily scale, we can see the US Dollar Index has indeed navigated south of its 50-day simple moving average at 103.44 and subsequently retested the underside of the dynamic value. Note that these averages can (and often do) establish support and resistance.
Local support exists around the 102.90ish region, which we may visit shortly. Yet, having noted room to manoeuvre south on the monthly scale—both on the price chart and the RSI—we can also see that scope to explore lower is evident on the daily chart. Alongside room to move south on the daily timeframe’s RSI indicator after recently taking out the 50.00 centreline and the price recently puncturing its 50-day simple moving average, clearance of 102.90 support is technically favoured, a move potentially supporting breakout sellers in the direction of daily demand coming in from 100.27-100.77.
This material on this website is intended for illustrative purposes and general information only. It does not constitute financial advice nor does it take into account your investment objectives, financial situation or particular needs. Commission, interest, platform fees, dividends, variation margin and other fees and charges may apply to financial products or services available from FP Markets. The information in this website has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire or dispose of any financial product. Contracts for Difference (CFDs) are derivatives and can be risky; losses can exceed your initial payment and you must be able to meet all margin calls as soon as they are made. When trading CFDs you do not own or have any rights to the CFDs underlying assets.
FP Markets recommends that you seek independent advice from an appropriately qualified person before deciding to invest in or dispose of a derivative. A Product Disclosure Statement for each of the financial products is available from FP Markets can be obtained either from this website or on request from our offices and should be considered before entering into transactions with us. First Prudential Markets Pty Ltd (ABN 16 112 600 281, AFS Licence No. 286354).
Recommended Content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.