US Dollar Index outlook: Hits five-month high as strong US data raise doubts about rate cuts

Slobodan Drvenica Windsor Brokers

US Dollar Index

The dollar continues to strengthen against its major peers, extending the steep upleg into fifth straight day and posting new five month high in early Tuesday.

The latest economic data from the US showed stronger than expected rise in retail sales, adding to signals that the US economy is in good condition, after recent robust labor data contributed to signals.

Strong numbers also support the idea that the Fed may not be in rush to start cutting interest rates that additionally support the dollar.

Fresh gains on Tuesday cracked pivotal barrier at 106.11 (weekly Ichimoku cloud top), but bulls may face increased headwinds here, as daily studies are strongly overbought.

Dips are likely to be limited, with solid supports at 105.00 zone (broken Fibo 38.2% of 114.72/99.20 / rising daily Tenkan-sen) to contain and keep bulls intact for attempts through weekly cloud top and attack at next strong barrier at 107.00 zone (Oct lower platform / 50% retracement).

Res: 106.22; 107.00; 107.88; 108.62.
Sup: 105.61; 105.13; 104.92; 104.24.

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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