US Dollar Index struggles to defend the first weekly gain in three ahead of key consumer-centric data


Share:
  • US Dollar Index holds lower ground after two-day downtrend but stays positive on weekly basis.
  • Pre-Fed sentiment keeps DXY bulls hopeful even as downbeat US data, risk-on mood favor bears.
  • US Michigan Consumer Sentiment Index, 5-year Inflation Expectations will be important for fresh impulse, risk catalyst are the key.

US Dollar Index (DXY) remains on the back foot around 104.80 during early Friday, following the two-day losing streak. Even so, the greenback’s gauge versus the six major currencies braces for the first weekly gain in three ahead of the key US consumer-centric data.

In doing so, the DXY ignores recently firmer US Treasury bond yields amid downbeat US data. That said, a likely improvement in Sino-American relations and China’s gradual easing of the Zero-Covid policy to favor the US Dollar Index bears. However, the fears emanating from Russia and hopes that the US economic recovery could allow the Federal Reserve (Fed) to remain hawkish in the next week seem to restrict the gauge’s downside.

“China wants stabilized relations with the United States in the short term as it faces domestic economic challenges and push back in Asia to its assertive diplomacy, White House Indo-Pacific coordinator Kurt Campbell said on Thursday,” reported Reuters.

Recently, US Treasury Secretary Janet Yellen said on Thursday that "Recession is not inevitable," while also declining to say whether the dollar had peaked against other currencies.

On the other hand, the benchmark United States 10-year Treasury bond yields recovered from the lowest levels since mid-September but the yield inversion keeps suggesting recession fears and favor the DXY bulls. It should be noted that S&P 500 Futures print mild gains while Wall Street closed positive on Thursday.

On Thursday, US Initial Jobless Claims matched 230K market consensus for the week ended on December 02, versus the upwardly revised 226K prior. Further, the four-week average also printed 230K figure compared to 229K previous readings. Earlier in the week, the US Goods and Services Trade Balance deteriorated to $-78.2 billion versus $-79.1 billion expected and $-73.28 billion prior. Further, the final readings of the Unit Labour for Q3 eased to 2.4% QoQ versus 3.5% first estimations.

Looking forward, the scheduled top-tier readings from China and the United States could entertain DXY traders ahead of the next week’s crucial central bank meetings.

Amond them, China Consumer Price Index (CPI) is expected to repeat 0.1% MoM figure in November but is likely to ease to 1.0% YoY versus 2.0% previous readings. Further, the Producer Price Index (PPI) could decline to -1.5% compared to -1.3% prior during the stated month. Additionally, the preliminary readings of the Michigan Consumer Sentiment Index for December, expected 53.3 versus 56.8 prior, will entertain DXY traders afterward. Also important to watch will be the University of Michigan’s (UoM) 5-year Consumer Inflation Expectations for the said month, 3.0% previous readings.

Technical analysis

A three-week-old descending resistance line, around 105.55 by the press time, holds the key to DXY bull’s entry.

Additional important levels

Overview
Today last price 104.79
Today Daily Change -0.41
Today Daily Change % -0.39%
Today daily open 105.2
 
Trends
Daily SMA20 106
Daily SMA50 108.53
Daily SMA100 109.15
Daily SMA200 106.19
 
Levels
Previous Daily High 105.82
Previous Daily Low 104.87
Previous Weekly High 107.2
Previous Weekly Low 104.37
Previous Monthly High 113.15
Previous Monthly Low 105.32
Daily Fibonacci 38.2% 105.24
Daily Fibonacci 61.8% 105.46
Daily Pivot Point S1 104.78
Daily Pivot Point S2 104.35
Daily Pivot Point S3 103.83
Daily Pivot Point R1 105.73
Daily Pivot Point R2 106.25
Daily Pivot Point R3 106.68

 

 

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD clings to gains near 1.0900 as USD remains weak

EUR/USD clings to gains near 1.0900 as USD remains weak

EUR/USD has regained its traction and climbed to the 1.0900 area in the American session following a technical correction early in the day. The persistent US Dollar weakness amid improving risk mood allows the pair to keep its footing in the second half of the day.

EUR/USD News

GBP/USD stabilizes above 1.2300 on BOE day

GBP/USD stabilizes above 1.2300 on BOE day

Following a pullback with the initial reaction to the Bank of England's policy announcements, GBP/USD has regained its traction and climbed above 1.2300. The pair remains on track to post gains for the second straight day as the US Dollar struggles to find demand.

GBP/USD News

Gold: XAU/USD approaches $2,000 amid broad US Dollar weaknes Premium

Gold: XAU/USD approaches $2,000 amid broad US Dollar weaknes

Spot gold retains its positive momentum and trades around $1,995 a troy ounce on Thursday. XAU/USD is extending its post-Fed advance, as the American central bank came out with a dovish message on Wednesday, triggering a dollar’s sell-off.

Gold News

Breaking: Terraform Labs founder Do Kwon arrested in Montenegro: Interior minister

Breaking: Terraform Labs founder Do Kwon arrested in Montenegro: Interior minister

Terraform Labs' founder Do Kwon is arrested, according to Minister of Interior of Montenegro Filip Adzic. This is a developing story and will updated

Read more

Ford (F) Stock News and Forecast: $3 billion EV loss leads shares to advance

Ford (F) Stock News and Forecast: $3 billion EV loss leads shares to advance

Ford (F) stock is demonstrating on Thursday exactly why automotive C suites are pivoting to electric vehicles. It is not because of the environment or due to easy profits. It is because the market likes it. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures