US DOLLAR PRICE OUTLOOK: DXY INDEX CLIMBS TO FRESH POST-FOMC HIGHSUS Greenback bulls made a powerful push to shut out the primary half of the yr 2
US DOLLAR PRICE OUTLOOK: DXY INDEX CLIMBS TO FRESH POST-FOMC HIGHS
- US Greenback bulls made a powerful push to shut out the primary half of the yr 2.7% larger
- DXY Index may problem development resistance as financial information weighs on Fed taper bets
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The US Greenback completed June and the primary half of 2021 on a constructive be aware after climbing 0.3% larger throughout Wednesday’s buying and selling session. This brings year-to-date good points notched by the DXY Index to 2.7% on stability. Fed officers have revealed notably hawkish shifts in coverage steerage with the newest dot plot and subsequent commentary. As such, current US Greenback power largely is available in response to markets pricing better danger of Federal Reserve tapering.
Fed Chair Jerome Powell has been vocal about downplaying the dot plot and FOMC taper danger, which helped gasoline a slight retracement of US Greenback power. US Greenback bulls have since made one other push this week, nevertheless, as high-impact financial information comes into focus. Particularly, markets already digested scorching red-hot shopper confidence information yesterday and a large beat on ADP employment this morning. Plus, there’ll possible be appreciable emphasis positioned on the upcoming launch of month-to-month PMI and NFP studies due later this week.
DXY – US DOLLAR INDEX PRICE CHART: WEEKLY TIME FRAME (DEC 2020 THROUGH JUN 2021)
Chart by @RichDvorakFX created utilizing TradingView
Broad US Greenback power seen throughout the board of main forex pairs leaves the DXY Index eyeing confluent resistance across the 92.50-92.80 worth zone. Seen on the chart above, this space is bolstered by a key descending trendline, the higher Bollinger Band, and 23.6% Fibonacci degree. Whereas it’s doable that month-end and quarter-end flows might have exacerbated US Greenback power up to now this week, there’s potential that bulls will look to problem this technical impediment. To that finish, invalidating this technical resistance degree might open up the door for the DXY Index to embark on its subsequent leg larger.
There’ll possible should be a catalyst to gasoline one other extension larger, nevertheless. Nonfarm payrolls information due Friday stands out as a powerful candidate with sufficient impetus to speed up US Greenback shopping for strain. This may correspond with better-than-expected readings on the headline change in NFPs and unemployment charge as that might possible up the strain on Fed officers to offer a timeline for tapering asset purchases. That mentioned, in-line PMI and NFP studies might disappoint Fed hawks and US Greenback bulls, which might see an unwind of current taper hypothesis.
— Written by Wealthy Dvorak, Analyst for DailyFX.com
Join with @RichDvorakFX on Twitter for real-time market perception
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