|

US Dollar Index: DXY suffers from downbeat data, yields amid Fed blackout

  • US Dollar Index edges lower as weak US data weigh on hawkish Fed bets.
  • Pre-FOMC blackout, light calendar elsewhere also prod DXY bulls.
  • Absence of US default fears jostles with fresh banking woes to challenge risk appetite.

US Dollar Index (DXY) stays defensive near 104.00 amid early Tuesday, after a volatile week-start that initially portrayed a run-up to 104.40 before marking a no-change day in the end.

The greenback’s gauge versus six major currencies dropped the previous day amid downbeat US data and Treasury bond yields. In doing so, the DXY also bears the burden of an absence of the Federal Reserve (Fed) talks amid the pre-FOMC blackout ahead of next week’s monetary policy meeting.

Talking about the data, US ISM Services PMI declined to 50.3 for May versus 51.5 expected and 51.9 prior whereas growth of the Factory Orders also deteriorated during the stated month to 0.4% versus 0.5% market forecasts and 0.9% previous readings. It should be noted that the final readings of S&P Global Composite PMI and Services PMI also marked softer figures for May.

With the softer US statistics, the market’s bets on the Fed’s June rate hike dropped from around 80% in the middle of the last week to nearly 25%. The same could have joined an absence of the Fed talks to weigh on the US Treasury bond yields and the US Dollar.

It should be noted, however, that International Monetary Fund (IMF) Managing Director Kristalina Georgieva suggested during the weekend that the Fed needs to do more to tame inflation, which in turn probed the Gold buyers.

Elsewhere, concerns about the need for the US large banks to hold more capital to battle the landing crisis contrasted with the policymakers’ ability to avoid the debt-ceiling expiration and confused the market players, as well as the DXY traders.

Moving on, a light calendar and the Fed blackout may keep troubling the momentum traders. That said, the US Consumer Price Index for May, due on June 13, is the next major US economic release before the Federal Open Market Committee (FOMC) monetary policy meeting on June 13-14.

Technical analysis

Monday’s “Gravestone Doji” bearish candlestick on the DXY’s daily chart drags it to the 100-day Exponential Moving Average (EMA) support of around 103.35.

Additional important levels

Overview
Today last price104.01
Today Daily Change-0.03
Today Daily Change %-0.03%
Today daily open104.04
 
Trends
Daily SMA20103.16
Daily SMA50102.39
Daily SMA100102.92
Daily SMA200105.45
 
Levels
Previous Daily High104.09
Previous Daily Low103.38
Previous Weekly High104.7
Previous Weekly Low103.38
Previous Monthly High104.7
Previous Monthly Low101.03
Daily Fibonacci 38.2%103.82
Daily Fibonacci 61.8%103.65
Daily Pivot Point S1103.58
Daily Pivot Point S2103.13
Daily Pivot Point S3102.87
Daily Pivot Point R1104.29
Daily Pivot Point R2104.54
Daily Pivot Point R3105

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

AUD/USD stays defensive below 0.7150 after Chinese data

AUD/USD remains on the back foot below 0.7150 in the Asian session on Tuesday, close to an over three-week low touched the previous day. US bond yields hold near multi-year highs ahead of the FOMC meeting and oil-driven inflation risks, supporting the US Dollar and weighing on the currency pair. Mixed Chinese activity data for August also fail to inspire the Aussie.

USD/JPY extends gains toward 155.00 amid USD resurgence

USD/JPY keeps pushing higher toward 155.00 early Tuesday, looking for more upside, as traders await the FOMC and BoJ meetings this week. Meanwhile, Fed rate-hike bets and oil-driven inflation risks keep US bond yields near multi-year highs, supporting the US Dollar and the pair. That said, a more hawkish repricing of the BoJ normalization path might continue to underpin the Japanese Yen and could limit USD/JPY's upside. .

Gold struggles near multi‑week low as Fed hike bets and geopolitical risks boost USD

Gold drifts lower for the second straight day, and trades around the $4,265-$4,264 region, down 0.80% during the first half of the European session on Tuesday. The commodity remains within striking distance of an over one-month low, which it touched on Monday, as traders keenly await the crucial two-day FOMC policy meeting, starting later today.

Dogecoin clings to EMA support as recovery lacks conviction
Dogecoin (DOGE) hovers around $0.083 at the time of writing on Tuesday after finding support around the key support zone the previous day. Quiet institutional demand, along with mixed derivatives positioning, suggests fading interest in the dog-themed meme coin.
Markets slide as FOMC approaches
The US Dollar remains strong as markets turn increasingly cautious ahead of the FOMC. Stocks are tumbling, while Gold and Silver are moving lower under pressure from the stronger Dollar. The Japanese Yen is weaker again, while Crypto is correcting. BTC is approaching a key technical test and could fall below its 50-week moving average, while ETH remains above $2,405.
Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight
The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.