Published on Mar 23, 2023

Daily Analysis For US Doller Index 23-03-2023

US Doller Index Analysis

Economic Events and Scenario for US Doller Index

Economic Events : -

GMT	Event	Impact	Currency
07:00	(Lithuania) Industrial Production YoY	Low	EUR
07:00	(Lithuania) Industrial Production MoM	Low	EUR
08:00	(European Union) European Council Meeting	Medium	EUR
08:30	(Switzerland) SNB Interest Rate Decision	Medium	CHF
09:00	(Greece) Current Account	Low	EUR
09:30	(Slovenia) Consumer Confidence	Low	EUR
11:30	(Germany) Bundesbank Balz Speech	Low	EUR
12:00	(United Kingdom) BoE Interest Rate Decision	High	GBP
12:00	(United Kingdom) MPC Meeting Minutes	Medium	GBP
12:00	(United Kingdom) BoE MPC Vote Hike	Medium	GBP
12:00	(United Kingdom) BoE MPC Vote Unchanged	Medium	GBP
12:00	(United Kingdom) BoE MPC Vote Cut	Medium	GBP
12:00	(United States) Building Permits	Medium	USD
12:00	(United States) Building Permits MoM	Low	USD
12:00	(Germany) undesbank Wuermeling Speech	Low	EUR
12:30	(United States) Current Account	Medium	USD
12:30	(United States) Jobless Claims 4-week Average	High	USD
12:30	(United States) Continuing Jobless Claims	High	USD
12:30	(United States) Initial Jobless Claims	High	USD
12:30	(United States) Chicago Fed National Activity Index	Medium	USD
14:00	(United States) New Home Sales MoM	High	USD
14:00	(United States) New Home Sales	High	USD
14:30	(United States) EIA Natural Gas Stocks Change	Low	USD
15:00	(Euro Area) Consumer Confidence	Medium	EUR
15:00	(United States) Kansas Fed Composite Index	Low	USD
15:00	(United States) Kansas Fed Manufacturing Index	Low	USD
15:00	(United Kingdom) BoE L Mann Speech	Medium	GBP
15:00	(Euro Area) ECB Lane Speech	Low	EUR
15:30	(United States) 8-Week Bill Auction	Low	USD
15:30	(United States) 4-Week Bill Auction	Low	USD
17:00	(United States) 10-Year TIPS Auction	Low	USD
22:00	(Australia) Judo Bank Manufacturing PMI	High	AUD
22:00	(Australia) Judo Bank Services PMI	High	AUD
22:00	(Australia) Judo Bank Composite PMI	Low	AUD
23:30	(Japan) Inflation Rate Ex-Food and Energy YoY	Low	JPY
23:30	(Japan) Inflation Rate YoY	High	JPY
23:30	(Japan) Inflation Rate MoM	Low	JPY
23:30	(Japan) Core Inflation Rate YoY	Medium	JPY
23:50	(Japan) Foreign Bond Investment	Low	JPY
23:50	(Japan) Stock Investment by Foreigners	Low	JPY

Today's Scenario: - The US Dollar Index (DXY) is currently moving towards a support zone after forming an M-formation pattern. This pattern is typically considered a bullish reversal pattern, which could lead to a correction back towards the neckline in the near future.

Buy Scenario: - The daily chart shows a clear bearish trend and suggests further weakness, although the oversold stochastic and price action encountering resistance at the 61.8% Fibonacci support level of 102.64 for the second consecutive day is limiting the bears' control.

The focus is now on the fundamentals, with the Federal Reserve's policy decision expected to be a key driver of the US dollar's direction.

Last week, the US dollar saw a strong rally on the news of the Credit Suisse collapse, which boosted demand, but the greenback failed to maintain its gains and quickly reversed over 1% on Wednesday, indicating that the overall picture is still negative.

US policymakers are facing a difficult situation as high inflation requires further policy tightening, but raising interest rates may damage the already fragile financial sector. High interest rates have played a significant role in the recent cracks in the banking system.

For the US dollar to see a bullish scenario, a 25 basis point hike and a hawkish stance in short-term projections are necessary. However, a 0.25% increase in interest rates with softer tones from Fed Chief Powell may not be sufficient to significantly boost the dollar. Till we do not advise to buy US Dollar Index.

Sell Scenario: - In the event of a surprise decision by the Fed to keep rates unchanged, fresh sales are expected, but it would also raise questions about the situation in the financial system, which could further boost uncertainty. Immediate and solid supports are at 106.64/51 (Fibo 61.8% / daily Ichimoku cloud base), and a firm break below this level would spark stronger acceleration towards 101.88 (Fibo 76.4%) and the key level of 100.66 (2023 low of Feb 2) in extension. Conversely, a lift above the pivotal barrier at 103.22 (daily cloud top) would revive bulls for a stronger rally. Till we do not advise to sell US Dollar Index.

Support and Resistance Level: -