US Dollar Index: Leg lower expected to hold on near 96.70
- The dollar index is searching for clear direction at press time, having staged a repeated bounce from the 50-day moving average (MA) this week.
- The newfound average support, however, could be breached if the consumer spending, as represented by the US retail sales, prints well below estimates. The data is due for release at 12:30 GMT.
The dollar index (DXY), which tracks the value of the greenback against major currencies, is currently flatlined at 97.00, having hit a high of 97.05 earlier today.
The DXY’s 50-day moving average (MA) has emerged as strong support this week. This is evident from the greenback’s defense of that average line in three out of the last four trading sessions.
As of writing, the 50-day MA support is located at 96.81. A break lower could happen later today if the US retail sales, due at 12:30 GMT, shows a big drop in consumer spending in March.
Retail sales, however, are seen rebounding 0.9 percent month-on-month in April, having dropped 0.2 percent in the preceding month. The core retail sales are expected to have risen 0.7 percent in April following a 0.4 percent drop in March.
Meanwhile, the retail sales control group, which is used to calculate the gross domestic product (GDP), is seen rebounding 0.4 percent.
A better-than-expected data could put a strong bid under the greenback, helping the bulls capitalize on the repeated bounce from the 50-day MA.
Apart from the retail sales figure, the American dollar may also take cues from the weekly jobless claims and the preliminary PMI readings for April.
Pivot points
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
