US Dollar Index stays pressured around 104.00 as Fed’s Powell lacks aggression, US PMI eyed


  • US Dollar Index prints a four-day downtrend as buyers fail to praise Fed’s Powell.
  • Powell’s reluctance for aggressive rate hikes join recently softer oil prices, downbeat US data to favor DXY bears.
  • Testimony 2.0, preliminary readings for June’s US PMI will be eyed for fresh impulse.

US Dollar Index (DXY) fades bounce off weekly low as sellers flirt with 104.20 during Thursday’s Asian session. In doing so, the greenback’s gauge versus the six major currencies drops for the fourth consecutive day as traders await the first readings of the US S&P Global PMIs for June.

Federal Reserve (Fed) Chairman Jerome Powell’s justification for the recent rate hike, the biggest since 1994, managed to gain acceptance, at least during the first round of the Testimony on the bi-annual Monetary Policy Report. However, Powell’s rejection of the need for a heavy rate increase seemed to exert downside pressure on the greenback afterward.

Elsewhere, a reduction in the oil prices and recently downbeat US data could also be linked to the DXY’s latest weakness. That said, WTI crude oil prices dropped 0.85% to $103.50, down for the second consecutive day around the lowest levels in six weeks. The black gold’s latest weakness could be linked to the bearish weekly inventory data from the American Petroleum Institute (API). As per the API Weekly Crude Oil Stock for the period ended on Jun 17, stockpiles rose 5.607 million barrels versus an increase of 0.736 million barrels the previous week. Additionally, talks that US President Joe Biden will announce gas tax relief by the end of the week also weighed on the oil prices.

It should be noted that the latest US figures concerning housing and activities have been softer for May, which in turn eases the pressure on the Fed to tame inflation. Earlier in the day, Reuters said, “An early look at the state of the US job market in June from payroll provider UKG suggests some strengthening, even as the Federal Reserve lifts interest rates sharply and economists raise alarms over the likelihood of a recession.

Against this backdrop, Wall Street managed to pare the day-start losses but ended Wednesday with mild losses whereas the US 10-year Treasury yields marked the biggest daily fall in a week by ending the day at around 3.16%, down two basis points near 3.14% by the press time. That said, the S&P 500 Futures drop 0.50% at the latest.

Having witnessed the initial reaction to Fed Chair Powell’s testimony, DXY watchers await the US S&P Global PMIs for June and the weekly Jobless Claims data. Also important will be the second round of Fed Chair Jerome Powell’s Testimony. Should Fed’s Powell keep rejecting the monetary policy aggression, the US Dollar Index will have a further downside to track.

Technical analysis

A clear downside break of a fortnight-old ascending trend line directs DXY towards the previous week’s low near 103.40.

Additional impotant levels

Overview
Today last price 104.22
Today Daily Change 0.00
Today Daily Change % 0.00%
Today daily open 104.22
 
Trends
Daily SMA20 103.25
Daily SMA50 102.89
Daily SMA100 100.34
Daily SMA200 97.75
 
Levels
Previous Daily High 104.95
Previous Daily Low 103.86
Previous Weekly High 105.79
Previous Weekly Low 103.42
Previous Monthly High 105.01
Previous Monthly Low 101.3
Daily Fibonacci 38.2% 104.28
Daily Fibonacci 61.8% 104.54
Daily Pivot Point S1 103.74
Daily Pivot Point S2 103.26
Daily Pivot Point S3 102.65
Daily Pivot Point R1 104.82
Daily Pivot Point R2 105.43
Daily Pivot Point R3 105.91

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 

EUR/USD News

GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 

GBP/USD News

Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures