Daily Analysis For US Doller Index 26-05-2023

Daily Analysis For US Doller Index 26-05-2023

US Doller Index Analysis
Key Points
• The index has retraced some of its recent gains after reaching recent highs.
• Policy makers are making progress towards reaching a deal on the debt ceiling issue.
• Later on Friday, the focus will be on US inflation, particularly the Personal Consumption Expenditures (PCE) index.
• The US Dollar Index continues to rise and is currently trading above 104.000. This upward movement is mainly driven by strong US Treasury bond yields.
• If the index manages to close above the 200-day Exponential Moving Average (EMA) for a third consecutive day, it could strengthen the bullish outlook. This could potentially push the index towards the 105.000 level.
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)
US Dollar Index (DXY)
Economic Events : -
GMTEventImpactCurrency
00:30(Japan) Tokyo Core CPI YoYLowJPY
00:30(Japan) Tokyo CPI YoYLowJPY
00:30(Japan) Tokyo CPI Ex Food and Energy YoYLowJPY
02:30(Australia) Retail Sales MoMHighAUD
04:35(Japan) 3-Month Bill AuctionLowJPY
06:00(Japan) Leading Economic IndexLowJPY
06:00(Japan) Coincident IndexLowJPY
07:00(Lithuania) Retail Sales MoMLowEUR
07:00(Lithuania) Retail Sales YoYLowEUR
07:00(United Kingdom) Retail Sales ex Fuel MoMHighGBP
07:00(United Kingdom) Retail Sales ex Fuel YoYHighGBP
07:00(United Kingdom) Retail Sales YoYHighGBP
07:00(United Kingdom) Retail Sales MoMHighGBP
07:30(Switzerland) Non Farm PayrollsLowCHF
07:45(France) Consumer ConfidenceMediumEUR
08:15(Euro Area) ECB Enria SpeechLowEUR
08:40(Euro Area) ECB Lane SpeechMediumEUR
09:00(Italy) Consumer ConfidenceMediumEUR
09:00(Italy) Business ConfidenceMediumEUR
09:00(Austria) Bank Austria Manufacturing PMIHighEUR
10:10(Italy) 6-Month BOT AuctionLowEUR
11:00(France) Jobseekers TotalLowEUR
11:00(France) Unemployment Benefit ClaimsMediumEUR
11:00(Luxembourg) Balance of TradeLowEUR
13:30(Canada) Wholesale Sales MoMLowCAD
13:30(United States) Goods Trade BalanceHighUSD
13:30(United States) Wholesale Inventories MoMMediumUSD
13:30(United States) Core PCE Price Index MoMHighUSD
13:30(United States) Core PCE Price Index YoYLowUSD
13:30(United States) PCE Price Index MoMMediumUSD
13:30(United States) PCE Price Index YoYMediumUSD
13:30(United States) Personal Spending MoMHighUSD
13:30(United States) Personal Income MoMHighUSD
13:30(United States) Retail Inventories Ex Autos MoMMediumUSD
13:30(United States) Durable Goods Orders Ex Transp MoMHighUSD
13:30(United States) Non Defense Goods Orders Ex AirLowUSD
13:30(United States) Durable Goods Orders MoMHighUSD
13:30(United States) Durable Goods Orders ex Defense MoMHighUSD
15:00(United States) Michigan Consumer ExpectationsLowUSD
15:00(United States) Michigan Current ConditionsLowUSD
15:00(United States) Michigan 5 Year Inflation ExpectationsLowUSD
15:00(United States) Michigan Consumer SentimentHighUSD
15:00(United States) Michigan Inflation ExpectationsLowUSD
16:00(Canada) Budget BalanceLowCAD
18:00(United States) Baker Hughes Oil Rig CountLowUSD
18:00(United States) Baker Hughes Total Rig CountLowUSD
Buy Scenario: - For two consecutive days, the US Dollar Index (DXY) has remained above the 200-day Exponential Moving Average (EMA), indicating gathering momentum for the bulls. A third daily close above the 200-day EMA would further solidify the bullish bias, especially considering the presence of a double-bottom chart pattern, which could potentially lead to a move towards the 105.000 level.
To validate the double-bottom pattern and confirm a bullish trend, the DXY would need to surpass crucial resistance levels. If it manages to break the year-to-date high of 105.883, it would strengthen the bullish case. Additionally, the Relative Strength Index (RSI) indicator is currently in bullish territory with some room to go before reaching overbought levels. The 3-day Rate of Change (RoC) suggests that buyers are currently in control.
If the DXY successfully reclaims the 104.000 level, the next resistance to test would be the daily high from March 15 at 105.103. A break above that level would pave the way for a clear upward move towards an eight-month-old resistance trendline in the 105.300-600 area, followed by a potential breakthrough of the year-to-date high at 105.883. Till we do not advise to buy US Dollar Index.
Sell Scenario: - However, there are downside risks for the DXY if it fails to maintain its position above the 200-day EMA. In such a scenario, the greenback could slide towards the 100-day EMA at 103.212. A decisive break below that level would lead the DXY towards the swing low from May 22 at 102.964, just below the 103.000 mark. Till we do not advise to sell in US Dollar Index
Support and Resistance Level: -
SupportResistance
S1 103.93-R1 104.42
S2 103.63-R2 104.61
S3 103.44-R3 104.91

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