After Monday’s selloff, the US dollar begins to recover.
The US Dollar (USD) is correcting from weekly lows as bulls regain their foothold amid widespread risk aversion. Rising market anxieties stem from the impending US debt limit deadline and a lack of clarity on the Federal Reserve’s (Fed) interest rate forecast. Investors rebalance their US Dollar bets as they prepare for a week of high-profile quarterly profits and carefully anticipated US economic data.
Meanwhile, the European Central Bank (ECB), the Bank of Japan (BoJ). The Bank of England (BoE), and the Swiss National Bank (SNB) said in a joint statement that. As financial market volatility has decreased. They would lower the frequency of their dollar transactions with the Fed beginning May 1. This announcement appears to provide an extra boost to the USD.
This week’s top-tier economic statistics and technology results from the United States will have an impact on USD valuation.
This week’s earnings contain a slew of potential market movers. Including Alphabet Inc, Microsoft Corp, Meta Platforms Inc, and Amazon.com.
In the second part of this week, the first-quarter Gross Domestic Product (GDP) and April Personal Consumption Expenditures (PCE) Price Index will be eagerly watched. Meanwhile, the mid-tier US Conference Board Consumer Confidence data and housing data will keep US Dollar traders entertained.
The US Dollar Index, which measures the performance of the US currency against a basket of six major currencies, is trading slightly higher on the day, reaching 101.60.
The daily technical setup for the US Dollar Index continues to favor bearish in the short run.
On its way back from weekly lows, the US Dollar Index (DXY) is testing the psychological level of 101.50. If DXY manages to close above the bearish 21-Day Moving Average (DMA), the rebound may gain steam.
On a daily candlestick closing basis, the index has failed to finish above the 21 DMA since March 15. Acceptance over the latter might spark a new upsurge towards the psychological barrier of 102.50, after which the junction of the downward-sloping 50 and 100 DMAs at approximately 103.30 will be on buyers’ radars.
However, with the 14-day Relative Strength Index (RSI) remains below the 50.00 mark, DXY’s rebound attempts are likely to be sold into.
At the, there is immediate assistance. Intraday low of 101.19, below which the round number of 101.00 will call into question the bullish pledges. Deeper drops will seek confirmation from the multi-month low of 100.78 set on April 14.
