Daily Analysis For US Doller Index 12-06-2023

Daily Analysis For US Doller Index 12-06-2023

US Doller Index Analysis


Key Points: -


·       The US Dollar Index (DXY) has managed to hold onto its corrective bounce from Friday but struggles to gain momentum following a two-week downtrend. The index, which measures the value of the US dollar against a basket of major currencies, faces pressure as market participants reassess their expectations regarding the Federal Reserve's monetary policy decisions and look for clues regarding inflation.


·       DXY bears are cautious ahead of top-tier data releases and events that could provide further insight into the market's bets on the likelihood of a rate hike by the Federal Reserve in June. One key data point to watch is the US Consumer Price Index (CPI), which will play a crucial role in confirming or challenging the market's expectations.


·       The market sentiment towards the US dollar will largely depend on the outcome of the CPI data and its implications for the Fed's future policy decisions. If the data aligns with the market's expectations of no rate hike in June, it could keep the DXY bears in control. On the other hand, any surprises or indications of higher inflation could prompt a reassessment of the Fed's stance and potentially support the US dollar.


Today's Scenario: -


The US Dollar Index (DXY), which measures the value of the US Dollar against a basket of six major currencies, has continued its rally for four consecutive days. It has moved further away from the 200-day Exponential Moving Average (EMA) level, which was reached on May 24 at 103.743. The recent strength of the index has been supported by high US Treasury bond yields. As of the time of writing, the DXY is trading at 104.211, showing a gain of 0.31%. Bullish investors are now targeting the 105.000 level.


Diagram of US Dollar Index (DXY): -

Economic Events : -


Date      Event                                                                                        Impact             Currency

4:15      (New Zealand) Electronic Retail Card Spending YoY    Low     NZD

4:15      (New Zealand) Electronic Retail Card Spending MoM  Low     NZD

5:20      (Japan) PPI YoY                                                                            Low             JPY

5:20      (Japan) PPI MoM                                                            Low           JPY

5:31      (Ireland) Construction PMI                                             Low          EUR

10:30    (Finland) Current Account                                             Low          EUR

11:30    (Japan) Machine Tool Orders YoY                                Low         JPY

12:30    (Slovakia) Construction Output YoY                              Low         EUR

13:30    (China) Total Social Financing                                                    Low           CNY

13:30    (China) New Yuan Loans                                                          Low CNY

13:30    (China) M2 Money Supply YoY                                                   Low           CNY

13:30    (China) Outstanding Loan Growth YoY                                      Low          CNY

13:30    (Switzerland) Myfxbook USDCHF Sentiment      Medium         CHF

13:30    (Australia) Myfxbook AUDUSD Sentiment         Medium         AUD

13:30    (Japan) Myfxbook USDJPY Sentiment                               Medium          JPY

13:30    (European Union) Myfxbook EURUSD Sentiment            Medium         EUR

13:30    (United Kingdom) Myfxbook GBPUSD Sentiment            Medium         GBP

13:30    (Canada) Myfxbook USDCAD Sentiment                          Medium           CAD

13:30    (New Zealand) Myfxbook NZDUSD Sentiment                 Medium         NZD

15:15    (European Union) EU Bond Auction                             Low          EUR

15:15    (European Union) 15-Year Bond Auction                                  Low          EUR

18:30    (Ecuador) Balance of Trade                                                       Low            USD

18:30    (France) 3-Month BTF Auction                                                 Low            EUR

18:30    (France) 12-Month BTF Auction                                               Low            EUR

18:30    (France) 6-Month BTF Auction                                                 Low            EUR

20:30    (Kosovo) Inflation Rate YoY                                                       Low            EUR

20:30    (United States) Consumer Inflation Expectations                    Low         USD

21:00    (United States) 6-Month Bill Auction                                        Low          USD

21:00    (United States) 3-Year Note Auction                                         Low          USD

22:30    (United States) 3-Month Bill Auction                                        Low          USD

22:30    (United States) 10-Year Note Auction                                       Low          USD

23:30    (United States) Monthly Budget Statement       Medium        USD



Buy Scenario: -


On the upside, if there is a significant upward move, there is a cluster of resistance levels between 105.82 and 105.36. This resistance zone includes a trendline resistance drawn from the high at 114.78, the 200-day simple moving average positioned at 105.45, and two Fibonacci retracement ratios (38.2% and 61.8%) at 105.54 and 105.25, respectively.


These technical levels provide important reference points for traders and investors to monitor as they can act as potential barriers or triggers for further price movement. Till we do not advise to buy US Dollar Index.


Sell Scenario: -

From a technical standpoint, there are two key areas to watch for the US Dollar Index (DXY) this week. On the downside, there is the 50-day simple moving average located at 102.51, which serves as a dynamic level of support. Additionally, there is local support at 102.26, further reinforcing the significance of this area. Till we do not advise to sell in US Dollar Index


Support and Resistance Level: -

 Support               Resistance  

 S1 103.36    -      R1 103.67

 S2 103.17   -       R2 103.80

 S3 103.05   -       R3 103.99



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